WASHINGTON — Residential construction spending slipped 3.5 percent for the month and is down 33.3 percent from May 2008.
Overall, total construction spending was down 0.9 percent compared to April and was 11.6 percent lower than levels in May 2008.
“Until now, much of the talk about the stimulus package has been just that, talk,” said Associated Builders and Contractors’ chief economist Anirban Basu. “We now approach the moment of truth. The stimulus package should have its maximum impact during the third quarter of this year, adding roughly 3 percent to annualized Gross Domestic Product.
“It is expected that much of the improvement will evolve around transportation projects that will soon get underway, a boom to the economy generally and to the nonresidential construction sector particularly. The fourth quarter should be similarly impacted, perhaps enough to bring the U.S. out of the ongoing recession.
“Indeed, the May construction spending data suggests that the stimulus package has already begun to have noteworthy impacts. Behind manufacturing and power, transportation recorded the third-fastest pace of construction spending growth of the 16 non-residential construction segments monitored by the federal government. One would expect to witness significant construction volume increases in that construction category in the month ahead.”
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