December Construction Spending Preview
December Construction Spending is expected to fall 0.6% after gaining 0.1% in November. Residential Construction is likely to drop for the 22nd consecutive month as Housing Starts, Completions and Building Permits continued their slide in December.
Private Non-Residential Investment could be a positive addition, but is likely to show a marked deceleration. The credit-market spillover will continue to put pressure on the non-residential sector and drag down total construction spending, which compromises roughly 20% of GNP.
The December Jobs report showed a 1.1% drop in construction hours in December, consistent with the anticipated decline in construction spending. Public Construction is expected to be unchanged after a 2.5% jump in November helped keep total construction spending marginally positive. It does not appear that marginal increases in public and non-residential construction spending will be enough to offset continued deterioration in residential construction spending.