Real estate construction spending
In predictable fashion, construction spending continued to decline in November of 2009, reports the US Commerce Department. Total spending declined and some sectors were harder hit than others while residential real estate construction spending fell just under 20% from November 2008 (a less grim number than the 23% year over year drop experienced in October) while commercial construction spending nosedived 40%!
Commercial construction spending only dropped 1% in November from October but overall, it nosedived a heartbreaking 40.5% from November 2008. Do you think the commercial sector was overheated in the first place, making this a predictable drop or is it because CRE is more dependent on the global market than the residential sector?
The statistical data:
Below are the real estate sectors we most closely monitor and the changes they are going through regarding construction spending with the universal verdict being that the numbers are dropping gradually this fall yet in comparison to the same time last year, the dip is pretty severe.
We’ll continue to see these numbers slide gradually but the worst may not yet be here for the commercial real estate sector. It will be interesting to see how the general contracting firms react during this down time.
