Economic News Blog
Posted by: Steven Kline, Jr. 1. March 2016

Construction Spending Seeing Slower Growth

The value of construction put in place in January 2016 was $77,586 (millions of real dollars). Compared with one year ago, spending in January was up 13.2 percent, which is a historically strong rate of growth. However, the rate of growth has decelerated the last four months. In fact, the month-over-month rate of change was is growing at its slowest rate since January 2015.

The bubble in construction spending is happening as consumers are already starting to moderate their spending, which means the revenue may not be there to support all of the construction loans. While the Federal Reserve finally raised its overnight lending rate, the change in the 10-year treasury rate actually moved down, which is positive for future construction spending.

Real construction spending is a good leading indicator for construction materialshardware, and HVAC industrial production.

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