2009: The Largest Contraction in Construction Spending Ever Recorded

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The Commerce Department today released December New Construction Spending data.

Previous Release: November New Construction
Last month it was reported that new construction spending fell 0.6 percent to $900.1 billion in November. This was worse than consensus forecasts which called for a 0.4 percent decline and also the lowest level of new construction spending since July 2003. Construction spending by private investors fell $4 billion to $581.2 billion in November, the worst read since August 1999. Residential building declined $4.2 billion to $250.7 billion.

Current Release: December New Construction
Consensus Estimate: -0.50 percent
Actual Result: Worse than forecast, -1.2 percent to an annual rate of $902.5 billion. This was the worst annual pace recorded since August 2003 when it was $901.8 billion.

From the release...

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during December 2009 was estimated at a seasonally adjusted annual rate of $902.5 billion, 1.2 percent below the revised November estimate of $913.2 billion. (Revised higher from $900.1)

The December figure is 9.9 percent below the December 2008 estimate of $1,002.1 billion. The value of construction in 2009 was $939.1 billion, 12.4 percent below the $1,072.1 billion spent in 2008.

This was the largest annual decline ever recorded. Here are the month over month changes in total new construction spending:

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $593.0 billion, 1.2 percent (±1.1%) below the revised November estimate of $599.9 billion.

Residential construction was at a seasonally adjusted annual rate of $260.4 billion in December, 2.8 percent (±1.3%) below the revised November estimate of $268.1 billion.

Nonresidential construction was at a seasonally adjusted annual rate of $332.5 billion in December, 0.2 percent (±1.1%)* above the revised November estimate of$331.8 billion.

he value of private construction in 2009 was $621.8 billion, 18.8 percent (±1.3%) below the $766.2 billion spent in 2008.

Residential construction in 2009 was $252.2 billion, 28.0 percent (±2.1%) below the 2008 figure of $350.1 billion and nonresidential construction was $369.6 billion, 11.2 percent (±1.3%) below the $416.1 billion in 2008.

Here is total New Residential Construction spending:


PUBLIC CONSTRUCTION
In December, the estimated seasonally adjusted annual rate of public construction spending was $309.6 billion, 1.2 percent(±1.9%)* below the revised November estimate of $313.3 billion.

Educational construction was at a seasonally adjusted annual rate of $80.3 billion, 0.4 percent (±2.9%)* below the revised November estimate of $80.6 billion.

Highway construction was ata seasonally adjusted annual rate of $83.7 billion, 2.3 percent (±4.8%)* below the revised November estimate of $85.7 billion.

The value of public construction in 2009 was $317.3 billion, 3.7 percent (±1.6%) above the $306.0 billion spent in 2008.Educational construction in 2009 was $86.3 billion, 0.9 percent (±3.2%)* above the 2008 figure of $85.5 billion and highway construction was $84.6 billion, 3.7 percent (±3.5%) above the $81.6 billion in 2008.

Here is a table summarizing the data:

READ MORE on the outlook for home building.