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Residential construction has collapsed to its lowest level relative to GDP (3.1%) ever recorded. Further declines are likely to be muted and in any event won't have much impact on GDP going forward. The big construction story now developing is the recent emergence of what could prove to be a substantial decline in nonresidential construction spending. Even though I have a bias to find good news out there, I can't ignore this piece of bad news.
2 comments:
Scott: How much impact will the (gulp) stimulus bill have on non-residential construction going forward, since there will ostensibly be a jolt of spending on highways, bridges, public works, etc.?
Good question. Off the top of my head I would say the "stimulus" bill will add no more than $75 billion or so to nonresidential construction activity over the next several years (ramping up slowly). That might offset the declines that the chart would otherwise suggest are in store for us. Someone please correct my memory, as I'm out of time right now.
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