Here’s what Global Insight economist Patrick Newport says about today’s data on July construction spending:
Construction spending fell 1.2% in July. The deteriorating housing market accounted for most of the drop.
Private residential spending fell 2.0%, while private nonresidential spending edged up 0.3%. Public construction spending fell 0.7%.
The downturn in housing starts accounted for the 3.0% drop in single-family residential construction. This category will continue to drop until housing starts stabilize.
Nonresidential construction posted its 11th monthly increase in 12 months. Public construction fell for the first time in 10 months.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.