US: Construction Spending Remains Weak in July
Wednesday, September 1, 2010
, Posted by Usman Ali Minhas at 9:30 AM
International Trading
Total construction spending fell 1.0 percent in July. June’s figure, originally reported as an increase, was revised to a drop of 0.8 percent. Residential outlays fell for the third straight month.
Tax Credit Payback Pulls Down Residential Outlays
- Total construction spending fell 1.0 percent in July with declines in both residential and nonresidential. Public outlays fell 1.2 percent in July with the drop mainly in nonresidential.
- Private residential construction fell for the third consecutive month which is likely payback from the homebuyers’ tax credit. Declines occurred across all residential spending components -single family, multi-family and home improvements.
Nonresidential Trend Still Suggests Weakness
- Private nonresidential construction spending posted a monthly gain, but the trend still suggests weakness. Outlays are now down 23.7 percent from year-ago levels. We remain cautious on our outlook. Funding for new projects remains hard to obtain and property fundamentals remain weak.
- We expect nonresidential spending declines to persist through 2010, which will continue to subtract from GDP.
