UPDATE: Construction spending contracted by 0.1% on a monthly basis in January.
That’s a huge disappointment since expectations were for growth of 1.0%.
This number marks a dark smudge on the series of positive data points we’ve seen from the housing sector lately, suggesting that the recovery in this industry may not be as strong as some analysts had hoped.
Analysts from Goldman Sachs just adjusted their predictions for the housing recovery based on models showing home prices continuing to decline at a rate of -3% from Q3 2011 to Q3 2012. If this forecast materialised, it would negatively impact construction spending as demand from potential investors will remain lacking.
ORIGINAL: January numbers on construction spending are due out at 10 AM ET.
Analysts are expecting construction spending to have increased by 1.0% month-over-month after growth of 1.5% in December. When that last number came out at the start of February, it destroyed expectations that construction spending for December would grow by just 0.5%.
We’ve seen some reassuring numbers coming out of the housing sector recently, and this number will be key to determining whether this trend will continue.