Construction Spending Dips Slightly in July

Econoday offers these Construction Spending highlights.

>A solid rise in residential spending offset a mixed showing for non-housing components and made for a 0.1 percent July rise in overall construction spending to barely come within Econoday’s consensus range. Residential spending rose 0.6 percent but July’s gain was entirely centered in home improvements which jumped 2.1 percent to offset outright declines of 0.3 percent in single-family homes and 0.4 percent for multi-families.

>Private non-residential spending fell 1.0 percent in the month, pulled down by a sharp fall in commercial projects, where spending has been uneven in recent months, that offset a fourth straight sharp gain in transportation. Public spending on educational building and highways & streets posted gains following declines in June.

>Year-on-year rates help underline what is a healthy rate of growth in construction spending, up 5.8 percent overall with residential spending up 6.7 percent and both private nonresidential and public categories showing low to mid single digit gains. Nevertheless, reports out of housing have been uneven and are clouded further by the declines in single- and multi-family homes in this report.

Housing-related reports have been poor for many months

1. New Home Sales Sink 1.7% to 627,000 Units: Builder Spec Homes Most Since 2009
2. Flattening Yield Curve in One Picture
3. Existing Home Sales Decline Fourth Month
4. Homebuilder Shares Dramatically Underperforming: Consumer Confidence Didn’t Help

When people cannot afford to buy homes, they eventually stop buying them.

Mike “Mish” Shedlock