There was actually some good news in real estate on Friday. The bad news was it
had nothing to do with the housing slump or the mortgage crunch.
According to the Census Bureau, spending on non-residential construction projects
was up 2.3 percent in August. This was enough to pull overall construction
spending into the plus category despite the 18th consecutive decline
in spending on housing. Total seasonally adjusted construction expenditures
were up 0.2 percent where analysts had expected a 0.2 percent decline.
Total construction spending for the month was $1,166,667,000 compared to $1,164,430,000
in July and $1,186,254,000 in August 2006. This is a decline of 1.7 percent
year-over-year. Residential spending for the month was estimated at $529,913,000
compared to $537,652,000 the previous month (a decline of 1.4 percent) and $631,210,000
one year ago, a change of -16 percent.
Non-residential spending was $636,754,000 in August, an increase of 1.6 percent
over the July figure of $537,652,000 and 14.7 percent above the $555,044,000
spent on non-residential construction one year ago.
Private sector construction accounted for $875,515,000 of the total and the
public sector $291,162,000. Commercial (i.e. retail) building was the largest
area for private sector spending ($83,445,000) and was up 14.7 percent from
one year ago. Spending on lodging, while in sixth place at $30,810,000 was up
a stunning 64.7 percent since August, 2006.
Education related construction and construction of highways and streets got
the lion's share of public sector money with $83,854,000 and 75,305,000
respectively. Education also was the number one area of total non-residential
spending at $101,280,000, an increase of nearly 21 percent since August 2006.