0
0
1
524
2987
Proactive Management
24
7
3504
14.0
Normal
0
false
false
false
EN-US
JA
X-NONE
/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-parent:””;
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin:0in;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:10.0pt;
font-family:Cambria;
mso-ascii-font-family:Cambria;
mso-ascii-theme-font:minor-latin;
mso-hansi-font-family:Cambria;
mso-hansi-theme-font:minor-latin;
mso-fareast-language:JA;}
By Shobhana
Chandra – Jun 1, 2012 10:00 AM ET (from Bloomberg)
Chandra – Jun 1, 2012 10:00 AM ET (from Bloomberg)
Construction spending in the U.S. rose
in April for a second month, helped by a surge in housing.
in April for a second month, helped by a surge in housing.
The 0.3 percent gain
followed a matching increase in March that was revised higher than previously
estimated, Commerce Department figures showed today in Washington. The median estimate of
economists surveyed by Bloomberg News called for a 0.4 percent rise.
followed a matching increase in March that was revised higher than previously
estimated, Commerce Department figures showed today in Washington. The median estimate of
economists surveyed by Bloomberg News called for a 0.4 percent rise.
Cheaper properties and low
borrowing costs are lifting orders at homebuilders like Toll Brothers Inc. (TOL),
a sign the industry that helped trigger the recession is improving. At the same
time, foreclosures remain a restraint on housing, and commercial construction
is unlikely to pick up until growth accelerates.
borrowing costs are lifting orders at homebuilders like Toll Brothers Inc. (TOL),
a sign the industry that helped trigger the recession is improving. At the same
time, foreclosures remain a restraint on housing, and commercial construction
is unlikely to pick up until growth accelerates.
“There’s a modest uptick
in demand” for homes, Michael Gapen, a senior U.S. economist at Barclays Plc in
New York, said before the
report. “The housing recovery should broaden out this year. We’re coming off
the bottom.”
in demand” for homes, Michael Gapen, a senior U.S. economist at Barclays Plc in
New York, said before the
report. “The housing recovery should broaden out this year. We’re coming off
the bottom.”
Estimates from 49
economists in the Bloomberg survey ranged from a drop of 0.3 percent to a gain
of 1.5 percent, following an initially reported 0.1 percent increase for March.
economists in the Bloomberg survey ranged from a drop of 0.3 percent to a gain
of 1.5 percent, following an initially reported 0.1 percent increase for March.
Construction spending
increased 6.3 percent in the 12 months ended in April, before adjusting for
seasonal variations.
increased 6.3 percent in the 12 months ended in April, before adjusting for
seasonal variations.
Private construction
spending rose 1.2 percent in April from the prior month.
spending rose 1.2 percent in April from the prior month.
Homebuilding Outlays
Homebuilding outlays
jumped 2.8 percent, the highest since October, including a 3.7 percent increase
in home improvement.
jumped 2.8 percent, the highest since October, including a 3.7 percent increase
in home improvement.
Private non-residential
projects spending declined by 0.2 percent.
projects spending declined by 0.2 percent.
Spending on public
construction fell 1.4 percent in April from the prior month. Federal
construction spending dropped 5 percent while state and local fell 1 percent.
construction fell 1.4 percent in April from the prior month. Federal
construction spending dropped 5 percent while state and local fell 1 percent.
Housing demand is
improving. Purchases of new houses climbed 3.3 percent in April, while those of
existing homes rose 3.4 percent, figures showed last month.
improving. Purchases of new houses climbed 3.3 percent in April, while those of
existing homes rose 3.4 percent, figures showed last month.
Construction is getting a
lift from higher sales. Housing starts rose 2.6 percent to a 717,000 annual
rate in April, according to Commerce Department figures released on May 16.
lift from higher sales. Housing starts rose 2.6 percent to a 717,000 annual
rate in April, according to Commerce Department figures released on May 16.
Toll Brothers is among the
builders reporting growth in orders. Second-quarter profit at the Horsham,
Pennsylvania-based company exceeded analysts’ estimates as orders surged 47
percent from a year earlier.
builders reporting growth in orders. Second-quarter profit at the Horsham,
Pennsylvania-based company exceeded analysts’ estimates as orders surged 47
percent from a year earlier.
“We are feeling better
than we have at any time in the past five years,” Chairman Robert Toll said on
a May 23 earnings call. “We would like to say we’re back, but we need a little
more confirmation. Nonetheless, it sure feels good compared to the desert we’ve
just crossed.”
than we have at any time in the past five years,” Chairman Robert Toll said on
a May 23 earnings call. “We would like to say we’re back, but we need a little
more confirmation. Nonetheless, it sure feels good compared to the desert we’ve
just crossed.”
Borrowing Costs
Borrowing costs remain
attractive. The average rate on a 30- year fixed mortgage fell to an all-time
low of 3.75 percent in the week ended May 31, according to Freddie Mac data
going back to 1971.
attractive. The average rate on a 30- year fixed mortgage fell to an all-time
low of 3.75 percent in the week ended May 31, according to Freddie Mac data
going back to 1971.
Construction funded by
government agencies is likely to stay under pressure. Communities and states
across the nation face soaring costs for pensions and retiree health benefits
as sales and property-tax revenue have fallen from the longest recession since
the 1930s.
government agencies is likely to stay under pressure. Communities and states
across the nation face soaring costs for pensions and retiree health benefits
as sales and property-tax revenue have fallen from the longest recession since
the 1930s.
To contact the reporter on
this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
Leave a Reply