Construction Spending: December 2007

Last week, the U.S. Census Bureau released their December read of construction spending again demonstrated the significant extent to which private residential construction is contracting particularly for single family structures.

With the tremendous weakening trend continuing, total residential construction spending fell 20.44% as compared to December 2006 and 33.62% from the peak set in February 2006.

Worse off though was private single family residential construction spending which declined 30.80% as compared to December 2006 and a truly grotesque 47.09% from the peak also set in February 2006.

Non-residential construction spending, currently accounting for just under half of all private spending, remains the only pillar of strength gaining a solid 20.34% as compared to December 2006.

As was noted in prior posts, commercial real estate (CRE) appears to be coming under some pressure with increasing vacancy rates and falling prices so keep your eye on the last three charts in the months to come for a clear indication of an ensuing pullback.

The following charts (click for larger versions) show private residential construction spending, private residential single family construction spending and private non-residential construction spending broken out and plotted since 1993 along with the monthly percent change to each since 1994 and 2000 – 2005.