Construction Spending still Going Strong
The value of construction put in place in February 2016 was $78,460 (millions of real dollars). Compared with one year ago, spending in February was up 17.3 percent, which is a historically strong rate of growth. However, the rate of growth has decelerated the last five months. The annual rate of growth continued to accelerate, but it appears that it should hit its peak rate of growth soon.
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. However, despite, the Fed's one attempt at raising interest rates, the change in the real 10-year treasury rate has increased at a slower rate in recent months, which is a positive sign for construction spending.blog comments powered by Disqus