U.S. Construction Spending Tumbled In April By Biggesst Amount In 5 Years

[Purveyor]

Source: Associated Press

WASHINGTON – U.S. construction spending fell in April by the biggest amount in five years, dragged by declines in housing, commercial construction and spending on government projects.

Construction spending dropped 1.8 percent in April after a 1.5 percent gain in March, the Commerce Department reported Wednesday. It was the biggest monthly decline since a 4.1 percent plunge in January 2011.

Spending on housing fell 1.5 percent, nonresidential building was also down 1.5 percent and spending on government projects declined 2.8 percent.

The drop in overall construction was unexpected. Private economists had been forecasting a gain of around 0.6 percent. Housing construction has been a bright spot for the economy in recent months. In the first quarter, residential investment grew at a sizzling annual rate of 17.2 percent.

Read more: http://www.ocregister.com/articles/percent-717805-construction-spending.html

[tonyt53]

1. Industrial construction is still very strong in some parts of the country, but not others.

Some traditionally strong industrial construction locations are down to nothing, the Pacific Northwest being one of them. The tech companies are no longer in a free spending mode.

[CountAllVotes]

2. Pacific northwest

Where I live you cannot build anything at all. They've closed up shop and left. The only good thing about no more building is less people and less cars BUT we are now seeing all sorts of speculators around attempting to buy up properties.

The house I live in was a trashed out foreclosure some 15 years ago. Its taken a lot of $ and work to make it what it is today which is a livable house, albeit very small house.

I strongly believe that the pacific northwest will be like the Bay Area in the future as the masses are moving north looking for a deal of sorts (are there any?).

I rather dread seeing it turn into a S.F. Bay Area scenario but its right around the corner and no building makes property values escalate as well.

No building = no jobs = people can't just hang-out and hope for something to pop-up forever.

[bucolic_frolic]

3. Overcapacity caused by cheap money

On paper, everything seemed profitable when borrowing was .5%

Capital was almost free!

[DemMomma4Sanders]

4. And the forest critters breathe a sigh of relief.....

[JackRiddler]

5. "In the first quarter, residential investment grew at a sizzling annual rate of 17.2 percent."

Followed by a sharp decline in construction.

Sounds like a bubble and a burst underway.