It continues to look like the bottom in the construction sector occurred just over a year ago. Spending on residential and nonresidential construction is up 6% and 7%, respectively, in the past year. Total construction spending is up at a 5% annual rate in the past six months.
After it's worst slump ever, residential construction spending is now growing faster than the rest of the economy. The gains are still minimal, but the important thing is that we have turned the corner and conditions are now improving, albeit slowly. Construction will once again be contributing to GDP growth, and that should be the case for many years to come, given its recent steep decline and the ongoing growth in the population: lots of catch-up to come here.