Residential Construction Picks Up

By:: Peter King | December 01, 2010

Spending on private residential construction picked up slightly in October, increasing 2.5 percent over the previous month, according to figures released today from the Census Bureau.

A seasonally adjusted $230 billion annual rate of private residential construction was put in place during the month, up from $224 billion the month before. It was the highest rate of residential construction in three months, although it still represented a 9.2 percent annual decline from the October 2009 rate of $253 billion.

Meanwhile, spending on nonresidential private construction fell slightly, declining to an annual rate of $252 billion, down 0.7 percent from September and a 20.7 percent annual decline from the October 2009 rate of $318 billion.

The report comes on the same day that the Federal Reserve reported that the economy is showing stronger signs of growth than expected, although the housing market remains in the doldrums. The Fed’s newest summary of current economic conditions, known as the Beige Book, reported that the economy, on balance, continued to improve from early October to mid-November, with slight-to-moderate growth in 10 of the nation’s 12 Federal Bank districts.

Manufacturing increased in all 12 districts, with relatively strong growth reported in the automotive and metal fabrication sectors, while consumer spending was generally positive as well. At the same time, the report said that housing markets remain depressed, with several districts showing weakening markets, including price declines in the eastern U.S. and the Kansas City District.

The Beige Book is released eight times a year and summaries economic conditions at approximately six-week intervals.

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