The Data DIGest, Dec. 31-Jan. 6
The value of construction put in place rose for the fourth straight month in November to $843 billion at a seasonally adjusted annual rate, the Census Bureau reported recently. (Seasonal adjustment is a statistical process to adjust for the number of work days and normal seasonal variation in activity among months. Annual rate means the value that would result if that month's activity continued for 12 months.) The volume was the highest in six months and stood 0.3% above October's revised figure, which itself was 1% higher than in September (originally estimated as a 0.3% gain). For the first 11 months of 2002, value put in place was 0.3% higher than in January-November 2001. Private residential and public construction were each up by 6%; private nonresidential construction was down by 17%.
Freddie Mac reported Thursday that its weekly survey of new 30-year fixed-rate mortgages fell again last week, to 5.85% from 5.93% the week before.
The first reports on December's economic activity, from the Institute for Supply Management, couldn't be more mixed. The ISM report on non-manufacturing activity showed an increase for the 11th straight month but at a slower rate than in November, with seven industry groups reporting increased activity, six reporting slower activity, and four reporting no change. Comments cited by ISM include; "The general building industry--commercial high-rise and residential mid- and high-rise--is off considerably when compared with year-ago work," and "We have branches in 14 major cities and these local economies are still slow, and businesses in general are reluctant to spend money to upgrade infrastructure." Construction was listed among industries reporting highest rates of contraction of new business, contraction of new orders, faster supplier deliveries (usually a sign of fewer purchases), highest rates of inventory decrease, decline of order backlogs and feeling that inventories were too high.
The ISM report on manufacturing indicated that economic activity in manufacturing grew in December for the first time in four months, with 11 of 20 industries reporting growth, while the overall economy grew for the 14th straight month, and at a faster rate than in November.
The DATA DIGest is a newsletter produced by Kenneth D. Simonson, chief economist for the Associated General Contractors of America, 333 John Carlyle Street, Suite 200, Alexandria, VA 22314, 703-837-5313; fax 703-837-5406; e-mail firstname.lastname@example.org; website www.agc.org.