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May-01-2008ECONOMIC REPORT Construction outlays fall 1.1% in March(topic overview)
CONTENTS:
- The U.S. Census Bureau of the Department of Commerce announced today that construction spending during March 2008 was estimated at a seasonally adjusted annual rate of $1,123.5 billion, 1.1 percent ('1.4%) below the revised February estimate of $1,136.5 billion. (More...)
- The report on jobless claims came a day ahead of a report on unemployment for April, which economists think will show that the unemployment rate edged up to 5.2 percent in April, from 5.1 percent in March. (More...)
- The March figure is 3.4% below the March 2007 estimate of $1,163.6 billion. (More...)
- Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. (More...)
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The U.S. Census Bureau of the Department of Commerce announced today that construction spending during March 2008 was estimated at a seasonally adjusted annual rate of $1,123.5 billion, 1.1 percent ('1.4%) below the revised February estimate of $1,136.5 billion. [1] The Commerce Department reports that construction spending fell 1.1% to a seasonally adjusted annual rate of $1.1 trillion. It is the fifth decline in the past six months.[2] The 86 responses to the survey ranged from 45.5 to 50.0. It was the third straight month of contraction for the headline PMI index, and the fourth reading below 50 in the past five months. At a seasonally adjusted annual rate of $1.124 trillion, construction spending fell to its lowest reading in March since June 2005.[3]
Private nonresidential construction spending, which advanced by 1.9 percent, hit an all-time high seasonally adjusted annual rate of $382 billion.[3] Nonresidential construction was at a seasonally adjusted annual rate of $382.3 billion in March, 1.9 percent ('1.4%) above the revised February estimate of $375.3 billion.[1]
The March figure is 3.4 percent ('1.9%) below the March 2007 estimate of $1,163.6 billion. During the first 3 months of this year, construction spending amounted to $241.6 billion, 2.4 percent ('1.9%) below the $247.4 billion for the same period in 2007.[1] U.S. construction spending fell a steeper-than-expected 1.1 percent in March after the prior month was revised sharply higher, a Commerce Department report showed on Thursday, with private home building suffering a record decline.[3] WASHINGTON (Thomson Financial) - U.S. construction spending was down again in March, but only after across-the-board revisions by the Commerce Department showed an interruption in the industry's long-running decline with a small February increase.[4]
The Commerce Department says construction spending fell by 1.1 percent to $1.12 trillion, the fifth decline in the past six months.[5]
The Commerce Department says consumer spending was up 0.4 percent in March, double the increase that economists had predicted.[5]
The March non-residential construction report included a 12.6 pct increase in communications, a 5.4 pct rise in lodging and a 1.9 pct increase in offices. Over the year, businesses increased their construction spending by 15.4 pct.[4] Construction by governments rose 0.6 pct in March. The federal government cut its spending by 2.1 pct but state and local governments raised theirs by 0.7 pct. Construction is clearly the weakest sector in GDP growth, said Robert Brusca of FAO Economics, but construction is only about 6 pct of GDP overall.' But while that means a decline concentrated in a small part of the GDP, 'its decline is severe and this decline negatively affects valuations on the stock of housing which is the critical reaction through which GDP might come to be more drastically affected.[4] More bad news that may just point to that R-word the President doesn't want to use -- Construction spending dropped sharply in March, with housing activity plunging by the largest amount on record.[5]
Housing construction had dropped for 23 straight months before a small increase in February. It remains in a slump as builders are still struggling to reduce record inventories in the face of poor demand.[2]
Once inflation was removed, spending edged up a much slower 0.1 percent -- a fourth straight lackluster performance, with consumers being battered by record gasoline prices, a deep slump in housing and rising job layoffs.[5] Private home building fell by a record 4.6 percent as the collapse of the country's housing market continued to hammer the industry.[3]
Total private construction was off 1.7 pct March after a 0.3 pct rise the previous month, revised up from a drop of 1.5 pct. Housing continued its contraction, with private residential construction falling 4.6 pct to its lowest level since this set of statistics was begun in 1993.[4] Business construction showed signs of strengthening in March, with a 1.9 pct gain on top of a 0.6 pct February increase, revised up from -1.0 pct and after showing signs of weakness since last November.[4]
'New single family construction was off a sharp 5.3 pct in March,' said Bank of America (nyse: BAC - news - people ) Securities economist Gary Bigg.[4] Total U.S. construction fell 1.1 pct March, not far off the 0.9 pct decline expected.[4]
The report on jobless claims came a day ahead of a report on unemployment for April, which economists think will show that the unemployment rate edged up to 5.2 percent in April, from 5.1 percent in March. [5] 'Stepping back from the monthly noise, though, it is clear that non-residential construction growth is slowing; it lags housing, so the outlook is bleak,' said Ian Shepherdson of High Frequency Economics. Economists expect businesses to cut back on their building projects because of an increasingly tough economic environment.[4]
The March figure is 3.4% below the March 2007 estimate of $1,163.6 billion. [1] Consumer spending rose faster than expected in March -- and while that may seem like a bright spot, almost all the gain occurred because of big increases in the price of energy and other products.[5]
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. [3]
SOURCES
1. Construction Spending Decreases 1.1 in March - Economy
2. 21 News Now, More Local News for Youngstown, Ohio - Spending down
3. INSTANT VIEW: ISM mfg index shows contraction for third month | Reuters
4. US March construction spending down 1.1 pct, February revised up UPDATE - Forbes.com
5. WSJM AM 1400 & FM 94.9 - Unemployment soars_ construction spending drops_ consumer spending disappoints
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