Construction spending at lowest point since ’02

[Amerigo Vespucci]

Source: MSNBC

WASHINGTON - Builders cut back on new projects at a faster-than-expected pace in February and drove down construction spending to the lowest level in eight years. It was a fresh sign that the troubled real-estate market remains a sore spot for the economic recovery.

The government says construction spending fell 1.3 percent to a seasonally adjusted annual rate of $846.23 billion, the lowest point since November 2002.

Economists were predicting builders would pare spending by 1 percent. It was the fourth straight month spending dropped, and the weakness was widespread.



Read more: http://www.msnbc.msn.com/id/36132813/ns/business-stocks_and_economy/

[Lost4words]

1. but CNBC says everything is great, getting better

[panader0]

2. Tell me about it.

My small general contracting business is nearly defunct. The only work is occasional side work. I do concrete, block, tile, framing, sheetrock, stucco and more--even so, work is quite scarce, although I've noticed a slight uptick. This town grew very fast for many years, now the brakes have been jammed down.

[Amerigo Vespucci]

6. Noticed a large "cracker box" apartment complex going up near me...

...one of those places where, if you open your tiny little bathroom window and reach out your hand a couple of inches, you can shake hands with your next door neighbor. The units all looked very small, and it was a small lot, but God, there were a LOT of them, just shoe-horned in. Big "coming soon" sign. I drove by and thought "how the hell did the demand for THIS arise?" There are "for rent" signs all over Silicon Valley, on every street that has an apartment complex.

On the other hand, pre-existing homes are selling a LOT faster than I'd expect. I have seen some in my neighborhood, and nearby, that couldn;t have had the "for sale" signs out front for more than a couple of weeks. These are single-family homes, small. Before the economy turned, at the worst of the real estate market in Silicon Valley (or the "best" if you were a house flipper, I guess) these tiny little homes were selling for $750K, the median home price at the time in this area. Lately I've seen them between $400 K for the smaller, $600 K for the larget, but that's the asking price. No telling what they actually sell for.

[IthinkThereforeIAM]

8. Yep, cracker box apartments...

... with vinyl woodwork, shoddy cabinetry and super cheap carpet that fills the vacuums with fuzz after vacuuming less than 10 sq ft.

[Dawgs]

3. Good. Construction needs to be down.

Too many empty homes and businesses already - need to employ these people by repairing existing buildings.

[Javaman]

5. Oddly, refabs, adds *& alts, expans and all fall under the title of construction.

I know, I work in that industry. So saying that "construction needs to be down" is a very odd statement.

[MARALE]

4. Nobody is hiring

If people are not employed, then there will not be any money to spend on construction. That is it, not rocket science.

[IthinkThereforeIAM]

7. One of the biggest real estate developers in Sioux Falls, SD...

... laid off their vice president for construction in the middle of January. Needless to say, they are one of the developers that put up too many strip malls, which are sitting empty. Just goes to show how years of loyalty and quality projects mean little to those who only chase money.