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:
Sector |
July 2008 |
July 2007 |
July 2006 |
July 2005 |
July 2004 |
---|---|---|---|---|---|
Total |
$1,084,355 |
$1,169,074 |
$1,199,990 |
$1,099,324 |
$997,226 |
Residential |
$365,583 |
$541,866 |
$636,550 |
$622,196 |
$545,757 |
Non-Residential |
$718,773 |
$627,207 |
$563,440 |
$477,128 |
$451,469 |
*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
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
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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