Residential construction spending bottoms

Construction spending was essentially flat for the four months ending in June. While nonresidential construction activity is likely to decline going forward, the three-year decline in residential construction spending has most likely come to an end. The Bloomberg index of home builders stocks is confirming this, having doubled since its March low. Activity may not pick up for several months, but the market is already looking across that valley to an eventual recovery in this, one of the weakest sectors in the economy for the past several years.