Construction spending grew in September 2010 according to US Census. The headlines:
The U.S. Census Bureau of the Department of Commerce announced today that construction spending during September
2010 was estimated at a seasonally adjusted annual rate of $801.7 billion, 0.5 percent (±1.9%) above the revised August
estimate of $797.5 billion. The September figure is 10.4 percent (±1.9%) below the September 2009 estimate of $894.8
During the first 9 months of this year, construction spending amounted to $612.6 billion, 11.2 percent (±1.0%) below the
$689.9 billion for the same period in 2009.
Looking at the unadjusted data, private sector spending is in a long term down trend – while public sector construction is in an uptrend.
In the coming era of balanced budgets and state spending cutbacks – public sector construction spending increases do not seem to have a bright future. Econintersect would like to point out that spending is the later stage of construction activity – and follows appropriations. Many construction activities in the public sector could have been authorized years ago – and a future slow down is already baked into the construction spending pie.
On the private side, the following graph from Calculated Risk shows the dismal condition of private construction spending.
Does anyone really expect the latest bump up in residential construction to have any follow through as we enter the slow months for home construction and fight through the mounting pile of foreclosures?