Floyd Norris points out the surprising data point: In terms of construction, CRE is now being outperformed by home building:
“The rapid decline in nonresidential construction reflects the fact that commercial projects often cannot be stopped immediately, even if the market has soured. Finishing a building is usually preferable to leaving it half built, since there is no possibility of renting out an unfinished shell. That helped to keep such spending up early in the recession, but it has since fallen off rapidly.
Figures for September, released this week, showed that residential construction spending rose a little compared with August, but remained well below year-ago levels. At the same time, figures for almost every category of nonresidential spending showed declines.”
At its peak, residential spending amounted was 55% of total construction spending, a “level unprecedented since the government began collecting such data in the 1960s.”
The charts below are based on total spending over 12-month periods, year over year. The figures are in not inflation-adjusted dollars.
click for larger graphic
Chart via NYT
In Construction, Homes Are the Good News
NYT, November 5, 2010