Monday, June 02, 2008

Construction Spending: April 2008

Today, the U.S. Census Bureau released their April read of construction spending again demonstrating the significant extent to which private residential construction is contracting particularly for single family structures while non-residential spending continued to grow essentially in-line with its recent expansion.

With the tremendous weakening trend continuing, total residential construction spending fell 21.01% as compared to April 2007 and 37.39% from the peak set in February 2006.

Worse off though was private single family residential construction spending which declined 37.51% as compared to April 2007 and a truly grotesque 56.07% from the peak set in February 2006.

Non-residential construction spending, currently accounting for just under half of all private construction spending, remains the only pillar of strength gaining 15.38% as compared to April 2007.

As was noted in prior posts, commercial real estate (CRE) appears to be coming under some pressure with increasing vacancy rates and falling prices.

Keep your eye on the last chart in the months to come for a clear indication of a 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 year-over-year and peak percent change to each since 1994 and 2000 – 2005.