Commerce Department Shows 0.4% Decline In November Construction Spending
The latest data from the Commerce Department indicated that construction spending fell 0.4 percent in November, the first decline in 17 months. Economists had expected a 0.6 percent increase for the month, Reuters reports. Reuters also reports that the department downwardly revised the construction spending figures from January 2005 through October 2015, citing a “processing error in the tabulation of data.” Bloomberg News says that with the downward revisions and weaker-than-expected November showing, “some economists may revise down their fourth-quarter GDP tracking forecasts.” The AP says the November report shows “weakness in spending on hotel and other private nonresidential construction and government projects.” Residential construction rose 0.3 percent, but nonresidential construction fell 0.7 percent. State and local government spending fell 0.4 percent, while Federal government construction was down 7.2 percent. Despite the contraction, construction spending came in “at a seasonally adjusted annual rate of $1.12 trillion, 10.5 percent higher than a year ago.” For the year through November, construction spending amounted to $1.01 trillion, 10.7 percent higher than the $913.9 billion during the first 11 months of 2014.
What This Means For Small Businesses
A decline in construction spending across categories is an indication the sector is continuing to experience uneven growth following the recession. Some uncertainty about the future of the US economy needs to be removed to brighten the overall economic landscape for small businesses. As NFIB Chief Economist William Dunkelberg cautioned in the latest Small Business Economic Trends report, “With weak expectations for sales and business conditions, prospects for strong inventory investment are poor.”
Construction Dive also reported the Commerce Department data.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.