Construction Spending Continues to Decline, But Could Be Leveling Off

Construction spending in November declined 0.6% from the previous month to a seasonally-adjusted annual rate of $900.1 billion, according to a just released report by the U.S. Census Bureau of the Department of Commerce. That represents a 13.2% decrease from November 2008 with construction spending of $1.03 billion. During the first 11 months of 2009, construction spending totaled $868.9 billion, about 12% less than the $994.9 billion for the same period in 2008.

For builders, the numbers (seasonally adjusted) show some hopeful signs of a bottom forming:

• Private residential construction spending totaled $250.7 billion in November, a slight decline of 1.6% from October.
• Private residential spending has stayed fairly level since last August.
• Since last July, private residential spending is up 5.67%.
• Public residential construction was up 8.9% in November year-over-year.
• As construction declines level off, experts predict some increase in residential spending in 2010.
• However, increases in construction spending will probably be slow until more of the existing home inventory is absorbed.

For more on the report, click here.