Economy Watch: Construction Spending, Bank Standards
- Nov 04, 2014
The Census Bureau reported on Monday that construction spending during September 2014 came in at an annualized rate of $950.9 billion, a drop of 0.4 percent compared with August. Both private and public spending decreased in September month over month. Still, the overall September 2014 rate is 2.9 percent higher than a year earlier.
Nonresidential construction dragged down the overall rate of construction spending for the month. Nonresidential spending dropped 0.6 percent in September compared with August, while residential construction was up 0.4 percent for the month.
Private single-family construction spending was up 1.1 percent in August compared with the previous month, and 9.8 percent compared with a year ago. Spending on private multi-family projects dropped by 1 percent for the month, but was up 25.7 percent compared with the same month a year ago, as per usual for the volatility of the sector. Spending on office, hotel and other commercial development was up for the month, but spending on most other categories of building projects dropped.
Banks Still Tight-Fisted Lenders to Consumers
In the Federal Reserve’s latest Senior Loan Officer Opinion Survey on Bank Lending, which it released on Monday, the central bank found that a “modest fraction” of banks eased their standards for commercial and industrial loans to firms of all sizes, and a larger number eased their pricing terms and some non-price terms. A good many banks also reported easing standards for construction and land development loans, a category of commercial real estate loans included in the survey.
On the demand side, a “modest fraction” of banks reported stronger demand for commercial and industrial loans to larger firms, the Fed said. Similar numbers of banks experienced stronger demand for all the categories of CRE loans covered in the survey.
Regarding loans to households, the Fed said that some large banks reported having eased standards on closed-end mortgage loans, but respondents generally indicated little change in standards and terms for other types of loans to households; they’re still relatively tight, as they have been since the recession. Some banks reported stronger demand for auto loans and weaker demand for nontraditional closed-end mortgage loans. Demand for other types of loans to households was more-or-less unchanged at most banks, the survey noted.
Wall Street paused its upward trajectory on Monday, ending the day mixed. The Dow Jones Industrial Average dropped 24.28 points, or 0.14 percent, and the S&P 500 was off a microscopic 0.01 percent. The Nasdaq was up 0.18 percent.