Economic News Blog
Posted by: Steven Kline, Jr. 4. May 2016

Construction Spending Starting to Grow Slower

(Neutral) The value of construction put in place in March 2016 was $85,763 (millions of real dollars). Compared with one year ago, spending in March was up 14.6 percent, which is a historically strong rate of growth. Construction spending has grown more than 10 percent each month since December 2014. However, the rate of growth has decelerated the last six months. The annual rate of growth decelerated for the first time since December 2014.

The bubble in construction spending is happening as consumers are already starting to slow down 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.

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

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