The Commerce Department recently released data detailing some of the pain in the construction market. This industry is generally viewed to be in the pits, but there are some bright spots. Let's have a look:


July 2008

July 2007

July 2006

July 2005

July 2004



















 *All numbers in millions. Seasonally adjusted, annualized rates.

Residential construction spending has fallen flat on its face, down around 42% in just the last two years. Not like that's breaking news or anything, but it does mean builders such as Beazer Homes (NYSE:BZH), KB Homes (NYSE:KBH), and Toll Brothers (NYSE:TOL) still need to keep searching for the light at the end of the tunnel ... provided the tunnel doesn't get foreclosed on. In fact, spending on private home building hasn't been this low in more than seven years -- probably not coincidentally, around the time of the last recession.

What did catch my attention was the surge in non-residential construction, which is now standing at multi-year highs. Some of this momentum can be seen through the strength of non-residential construction stocks like Fluor (NYSE:FLR) and Jacobs Engineering (NYSE:JEC), both of which have held up rather well in the last year. Some sectors of non-residential construction spending -- such as manufacturing, power, and public safety -- saw double-digit gains over the same period last year. That's really impressive stuff in light of the overall economy.

Unfortunately, many of the banks that funded the residential construction expansion are paying dearly for their mistakes. Earlier this week, the FDIC revealed in its quarterly report that insured banks and savings institution charge-offs related to real estate construction and development surged 1,508.2%, while commercial and industrial loans charge-offs rose 130.7% in the first quarter. Yikes.

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. The Fool has a disclosure policy.