Construction Spending Definitely Slowing

According to the Census Bureau, the value of construction put in place in November 2014 was $82,650 (millions of real dollars). Compared to one year ago, spending in November was up just 2.2%. This was the second slowest rate of month-over-month growth since June 2013. The rate of growth has been noticeably slower since July. Therefore, the annual rate of growth has decelerated the last five months and it is likely it will continue to do so in the upcoming months.

Residential construction spending, which makes up about 33% of total construction spending, was virtually flat on a month-over-month basis. And, this is after contracting in two of the last three months. The annual rate of change continued to decelerate from its peak in August 2013. The current rate of growth is the slowest since August 2012.

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