Construction Spending Declines

 

On a year-over-year basis, total spending activity for the private residential construction sector contracted 2.1 percent. June 2011 marked the 11th consecutive month in which spending fell compared to the previous year.
Courtesy of NAHB

Private residential construction spending slipped 0.3 percent on a month-to-month basis in June, which represents the fourth such decline of the current calendar year.

The initial estimate for May was revised higher, but continued to show a 0.8 percent decline versus the previous month. A slight gain in spending on new single-family homes (0.3 percent) was not enough to offset weaker readings for outlays on home improvements (-0.5 percent) and new multifamily units (-2.8 percent).

Construction of new single-family homes continues to bounce along the bottom close to historic lows. The large increase observed in June, single-family housing starts have struggled to gain any appreciable momentum during the past year.

Discerning a trend in the home improvement component of construction spending has been difficult due to large revisions in the data. Other indicators, namely the NAHB Remodeling Market Index and the Leading Indicator of Remodeling Activity, suggest remodeling demand is struggling due to a sluggish economy and a strict lending environment.

- Courtesy of NAHB