Peak Construction Spending?

Construction spending grew at 13.7% YoY in July. It has only grown at a faster pace than that once - at the very peak of the idiocy in Q1 2006.

Nope - no bubble here...


So that got us wondering... how is it that Construction Spending is surging as Lumber Prices are collapsing? (unless homes are now made of Twitter share certficates).


The answer is simple - lag... and we have seen this picture before... and it did not end well.

Clearly, the exuberant construction industry jumps on Fed-induced signals of recovery and mal-invests en masse... until reality bites again.


Charts: Bloomberg


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