Construction Spending Up 1.8% in December 2013

According to the Census Bureau, the value of construction put in place in December 2013 was $70,278 (millions of real dollars). Compared to one year ago, spending in December was up 1.8%. So, the one-month rate of change is growing again after contracting last month. However, the one-month rate of change has generally been slowing down since May 2013. As a result, the annual rate of change has seen a decelerating rate of growth since January 2013. 

Real construction spending is linked very closely to real consumer spending. Real disposable income is growing at a slower rate, which is to lead further slowing in the rate of growth of consumer spending. Therefore, I would expcted real construction spending to continue to grow at a slower rate in beginning of 2014. There is a chance that it will begin contracting later in 2014.

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