Need To Know News

• July Construction Spending is expected to fall 0.4% following a 0.4% decrease in June.

• Once again, weakness in Residential Construction is expected to be a major drag on total construction over the period, as poor access to credit has kept potential buyers on the fence and inventories of unsold homes high. Residential Construction fell 1.8% in June following a 1.1% decline in May. Single-Family Home Construction fell 3.7% in June after falling 3% in May.

• The July Employment report revealed a 0.6% drop in aggregate construction hours worked

• July Housing Starts Fell 1.1% to a multi-year low of 965k units annualized

• July Construction Spending is expected to fall 0.4% following a 0.4% decrease in June.

• Once again, weakness in Residential Construction is expected to be a major drag on total construction over the period, as poor access to credit has kept potential buyers on the fence and inventories of unsold homes high. Residential Construction fell 1.8% in June following a 1.1% decline in May. Single-Family Home Construction fell 3.7% in June after falling 3% in May.

• The July Employment report revealed a 0.6% drop in aggregate construction hours worked

• July Housing Starts Fell 1.1% to a multi-year low of 965k units annualized

June Construction Spending fell 0.4%, marginally worse than expected, following an upwardly revised 0% reading in May. Private construction spending fell 0.4%, but the May data was revised up to 0% from -0.7%.

Private construction in June fell to its lowest level since June ‘04.Private non-residential construction rose 0.8% in June and now stands at an all time high.

June private residential construction, down 1.8%, fell for a 15th consecutive month following an upwardly revised 1.1% decline in May. Private residential construction in June was the lowest reading since October ‘01.

Public construction fell 0.2% in June after an upwardly revised 0.1% increase in May. Federal construction reached and all time high after gaining 2.4% in June. State and local construction fell 0.4% in June following a downwardly revised 0.2% increase in May.

Despite the upward revisions to the May data, continued weakness is clearly evident in the June data; especially in private residential construction which is now down 26.7% on the year, compared to total construction spending which is down 5.9% on the year.

June Construction spending is expected to decline 0.3% after a 0.4% drop last month. In May, the y-o-y drop was 6.8%. Private residential construction fell 1.6% with single-family units down 3.4%. Y-o-Y, Private Residential Construction is down 27%. Private non-residential construction decreased 1.6% in April while public construction increased 0.4%.

Related data:

* June New Home Sales down 0.6%

* June Housing Starts up 9.1%, June Building Permits up 11.6% (data inflated by changes in NYC permit laws)

Construction spending fell 0.4% in May, less than expected and following an upwardly revised 0.1% drop in April (previously reported as -0.4%).

Residential construction was down 1.6%, while nonresidential edged up 0.3%, boosted by a 2.6% gain in lodging. Overall, construction spending was off 6% from May-07.

Private construction declined 0.7% after a flat reading the prior month, driven down by a 1.6% drop in the private residential category. Private nonresidential construction edged up 0.2% to an all-time high.

Public construction, meanwhile, also touched a record high, rising 0.4% in May after a 0.3% decline in April. The increase was driven by a 6.9% jump in public commercial building.

State and local construction was up 0.6%, and federal was down 1.7%.

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

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

The value of new construction spending fell 0.4% in April, not quite as steep a decline as analysts had expected. The March decline was less severe than previously reported, down 0.6% rather than the 1.1% decline reported last month.

Residential construction fell 2.3%, its 26th straight month of decline now that the previously reported February increase has been revised to a 1.3% decline. The March residential number was revised upward but still showed a 3% decline compared with last month’s reported 4.6% decline.

The decline in residential construction offset the 1.6% increase in private nonresidential construction, its largest percentage increase since last September. March’s increase was revised down to 1.2% from the previously reported 1.9% increase. Private nonresidential spending rose in almost all sectors except for communications facilities and amusement and recreational facilities. Manufacturing and power facilities showed strong gains for the month but the largest percentage increase was for lodgings, up 7.6%.

Public construction fell 0.3% as a 0.5 decline in state and local spending offset a 1.6% increase in Federal construction. The largest declines in public construction were in power facilities, sewage treatment conservation spending. However, spending on educational facilities also fell slightly. Construction spending for streets and highways was almost unchanged for the month. Spending rose for public residential housing, health care facilities and public safety.

On a year-over-year basis construction spending is down 3.9% from last April primarily reflecting the 20.8% decline in the value of residential construction. Private nonresidential construction is up 15.4% and public spending is up 6.8% from last year.

The Commerce Department reported today that starting on July 1, with the release of the May data, there will be a change in the way that the construction numbers are reported. Improvements to rental, vacant and summer homes will no longer be included in the private residential series.

Construction Spending is expected to fall 0.6% in April following a 1.1% decline prior. Private Residential Construction fell 4.6% in March, Private Non-Residential Construction rose 1.9%, and Public Construction increased 0.6%.

Private Residential Construction Spending will continue to drag on overall construction spending, especially single-family and home improvement spending, as the US housing market continues to stumble through spring.

Overall Construction Spending in April should received a boost from private non-residential and public construction spending, however these gains are unlikely to fully mitigate the negative impact from declines in private residential spending.

Related Data:

• April aggregate construction hours worked fell 1.5%
• March Pending Home Sales Index down 1%
• May NAHB Housing Market Index: 19 from 20 in April
• April Housing Starts up 8.2%, Building Permits up 4.9%
• March House Price Purchase Index down 0.4%
• April Existing Home Sales down 1%
• S&P/CaseShiller Composite 20 year-over-year down 14.4%
• April New Home Sales up 3.3%

Construction Spending is expected to fall 0.6% in April following a 1.1% decline prior. Private Residential Construction fell 4.6% in March, Private Non-Residential Construction rose 1.9%, and Public Construction increased 0.6%.

Private Residential Construction Spending will continue to drag on overall construction spending, especially single-family and home improvement spending, as the US housing market continues to stumble through spring.

Overall Construction Spending in April should received a boost from private non-residential and public construction spending, however these gains are unlikely to fully mitigate the negative impact from declines in private residential spending.

Related Data:

• April aggregate construction hours worked fell 1.5%
• March Pending Home Sales Index down 1%
• May NAHB Housing Market Index: 19 from 20 in April
• April Housing Starts up 8.2%, Building Permits up 4.9%
• March House Price Purchase Index down 0.4%
• April Existing Home Sales down 1%
• S&P/CaseShiller Composite 20 year-over-year down 14.4%
• April New Home Sales up 3.3%