US Construction Spending Just Collapsed

Tyler Durden's picture

Headline growth in US construction spending collapsed in July to just 1.6% YoY - the weakest since 2011.

As Reuters reports, U.S. construction spending unexpectedly fell in June as investment in public projects recorded its biggest drop since March 2002. The Commerce Department said on Tuesday that construction spending tumbled 1.3 percent to $1.21 trillion - the lowest level since September 2016 - drastically missing economists' estimates of a 0.4% increase.

This downside surprise suggests notable downside revisions to Q2 GDP (from its 2.6% annualized level).

However, most ironic in the government's report was, amid The White House constant chatter of the need for infrastructure spending in America, Federal government construction spending crashed 9.5% - the largest drop since December 2010.

Public construction spending has hovered in negative territory for the most part of the past year and requires a strong infrastructure spending for its revival. The latest data suggest state and local investment was weaker-than-previously estimated and imply a further modest downward revision to 2Q GDP.

In June, investment in public construction projects plunged 5.4 percent, the biggest drop since March 2002. The decline pushed public construction spending to its lowest level since February 2014. Outlays on state and local government construction projects fell 5.1 percent in June, also the largest fall since March 2002.

As Bloomberg Intelligence notes, the trends in the underlying components of construction spending of late are disconcerting, though the private sector slowdown could prove temporary as housing supply needs to increase. The public sector’s bleak performance is unlikely to see a significant change without a significant fiscal boost in the form of a well-thought-out infrastructure spending program.

Looking at taxpayer-funded spending on America’s highways, schools and water systems, the White House’s infrastructure plan appears long overdue. Government projects’ share of total construction outlays was less than 22 percent in June, the smallest since 2006.

Does this look 'transitory' to you?

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knukles's picture

Temporary.
A mere pause
A short breather
A moment to savor
Smell the flowers
Revel in your wealth and freedoms      /s/

Looney's picture

 

Is that a </scaramucci> tag?  ;-)

Looney

Blue Balls's picture

I remember Bernake coming to the Orange County Civic Center after his book elease talking to the Builders Convention crowd and all the economic illiterates applauding him for his ZIRP.

Sick how ignorant people are.

Cognitive Dissonance's picture

People were applauding their wallets, not their neighbors.

Self interest run riot.

<Shovel ready depression. First you dig a hole, then you keep on digging.>

BuddyEffed's picture

Bunker building should pick up the construction slack so look for an uptick next reporting period. Its the one true trickle down knock on effect. The elite don't build their own bunkers and look to the closest yokel locals.
Most of my stuff is sarc if your wondering.

python_snake's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it.!pa80d: Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2f0fLIz

Glassport's picture

Is that anything like self will run riot?

yrad's picture

I wonder what they are spending our tax dollars on then? Hmmm

froze25's picture

Anything and everything but what the average working Joe would use or enjoy.

Mr 9x19's picture

nonono what you doin stop this omg don't ask !

I woke up's picture

In a bit of a gully, it's just nerves

sirsmokum's picture

Constructing turds.

knukles's picture

Hey listen, I worked turd construction for far too long and believe me, you meet some of the worst kind there trying to fleece Ma and Pa Kettle in Dubuque

silverer's picture

That's just a chart of the construction work. First, you have to dig the hole...

readyforit's picture

Sunning and fluffing of beards.

Bill of Rights's picture

 “If you’ve got a business — you didn’t build that. Somebody else made that happen.”

 

Barack Obama

dirty fingernails's picture

Better get a war started before the unspinnable reality shows up

FreeShitter's picture

"vee vill, vee vill" - some jew banker

Too-Big-to-Bail's picture

The people at the FED must be feeling a lot like Bernie Madoff felt in the lead up to when he knew his gig was up but still before everyone finally finds out

Bill of Rights's picture

Is that a Helicopter I hear i the background?

Snaffew's picture

yeah,,,Apaches to shoot down any American dissidents

Bill of Rights's picture

Oh stop...been hearing that shit since 1940...

Snaffew's picture

American dissidents or Apaches?

Snaffew's picture

I guess you don't pay attention to all the convenient deaths that happen to anyone who questions or defies  the deep state, especially in the political arena.  Is your last name Cheney?

swmnguy's picture

I don't know; I can't drive from Point A to Point B in the Twin Cities.  Everything's torn up.  There's road construction, bridge construction, condo construction all over the place.  I've never seen so many major projects at once, public and private.  Mostly in the inner city, too; not just in the suburbs or swanky areas.

There's been so much construction I've been wondering where the hell all the money is coming from.  Stuff we've been saying we can't afford for years is all of a sudden getting done.  It's noticeable, and weird.

Of course, if America didn't have a $1 Trillion per year War habit, we'd have our infrastructure, healthcare finance, education finance, and retirement finance (among other things) fixed within a decade, with more than enough money to spare for actual Defense of America's borders, shores and airspace, which would face far fewer threats than they do now. 

ejmoosa's picture

Let's call that mal-investment.  

Here in Georgia, they have never taken as many tax dollars from us for construction than they are doing right now.

Which tax straw will break the camel's back?  We will soon find out.

madmax1965's picture

Yeah, same out here in AZ and  I was just in Buffalo, NY same thing there also.  I call bullshit on this article.

Snot Boogie's picture

They just finished some toll roads in the NoCo area, does that count?

Raging Debate's picture

Swn - Pretty much but have to add removing the tens of billions of Medicare and Medicaid fraud also. 

 

hootowl's picture

There should probably be several thousand more licensed muslime and Indian drug pushers in prison so we can get this prescription opioid epidemic under control.  That would help to cut the Medicare and Medicaid losses also.

 

In the Chicago area it is difficult to find a doctor who speaks english fluently.

hootowl's picture

The globalists need affordable housing for Ovomit's domestic muslime army.  Why should we spend to defend our borders when the Libtards invite them right into the country,.....unvetted.

 

The Libtard/progressives know that we don't need no stinking borders!!!

Snaffew's picture

this must be good news for the markets...is there anything ever not interpreted as good news?

MJ4Vets's picture

I'm hoping the Appropriations Bill for Military Construction, VA, & similar agencies is a factor in this.

Particularly, a holdup / holdouts for medical marijuana being able to be prescribed by the VA to Veterans in states that perform civil disobediance to the unConstitutional, lying, criminal DEA (you know - the branch of the CIA who attacks competitors.)

yogibear's picture

The Federal Reserve's  $200 billion/month QE4  on it's way.

Rick Cerone's picture

Pompous Trump says everything is great!

dow 22k baby

Dead Indiana Sky's picture

As long as the increase in our destruction spending can counterbalance our lack of construction dollars, we'll at least continue to spin our wheels and go nowhere.

Whodathunkit's picture

Scaramucci Scaramucci will you do the Fandango?

Thunderbolt of lighting

Very, very frightening me.

(Galileo) Galileo.

(Galileo) Galileo,

Galileo Figaro

Magnifico-o-o-o-o

Hume's picture

Oh, private sector construction spending did what, then?