Highlights
Construction spending in January fell at a faster pace – sharply worse than expected. Construction outlays declined a monthly 3.3 percent in January, after dropping 2.4 percent the month before. January's number was worse than the consensus forecast for a 1.5 percent decrease. Weakness in January was led by a sharp 4.3 percent plummet in private nonresidential outlays. The private residential component also declined and by 2.9 percent while public outlays rebounded 0.6 percent.

On a year-on-year basis, overall construction outlays were down 9.1 percent in January, compared to down 6.7 percent in December.

Today's construction numbers point to how bleak this sector is. Homebuilders have been pulling back on new construction for some time but now weakening corporate revenues are damping nonresidential construction.

The January construction outlays report certainly is a negative for equities although the personal income report and ISM manufacturing report were somewhat better than expected. But the big news is the financial difficulties of AIG reminding markets what bad shape the financial sector is in and equities were already headed down at open.

Market Consensus before announcement
Construction spending in December continued to plummet across all major sectors. Construction outlays fell 1.4 percent in December, after posting a 1.2 percent drop in November. Looking ahead, the 16.8 percent drop in housing starts in January indicates that the residential portion of construction outlays should continue downward. Weakening corporate profits and lower revenues for state and local governments indicate that the trend for nonresidential and public outlays is down for January and coming months.

2009 Release Schedule

Released On: 1/5 2/2 3/2 4/1 5/4 6/1 7/1 8/3 9/1 10/1 11/2 12/1 Release For: Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct