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Friday, November 30, 2012

Construction Spending Report

Construction spending rose 0.6 percent in September and is now
up 7.8 percent compared to a year earlier. The housing market
recovery has been a significant driver of recent gains. Residential
construction, which has historically accounted for about 45 percent
of total construction outlays, is up 19.2 percent on a year-over-year
basis after posting gains for six consecutive months. Nonresidential
spending, however, has deteriorated in recent months under
weaker petroleum and office construction and has slowed to a
2.6 percent year-over-year pace.

We look for construction spending to have increased 0.4 percent in
October. Housing starts increased 3.6 percent during the month
and are up 42 percent over the past year. In addition, the October
employment report showed the largest increase in construction
employment since January, intimating another modest increase in
construction activity for the month.

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