May Construction Spending Preview
Construction spending is expected to decline 0.5% in May following a 0.4% decline in April and a 0.6% decline in March. Private residential construction fell 2.3% with single-family units down 4.4% following a 4.6% decline in March. Private non-residential construction increased 1.6% in April while public construction fell 0.3%.
Further declines in private residential construction are expected to drag on construction spending in May, netting out potential increases in private non-residential and public construction. The May employment report revealed a 1.2% decline in the construction hours-worked index.
Government stimulus checks are unlikely to have any impact on construction spending as most houses still cost more than $600, despite recent declines in prices. Extended weakness in most consumer confidence data also suggest a rough buying environment over the period.
Related data:
• May New Home Sales down 2.5%
• May Housing Starts down 3.3%, Building Permits down 1.3%
• MBA Mortgage Applications down an average of 6.2% w-o-w in May