The US economy (along with global economies) were flipped on their collective heads with the Covid outbreak in early 2020. Since the decline in construction spending as a result of Covid (see dip in chart around March 2020), nonresidential construction spending has declined while residential construction spending has increased.
Residential construction spending has increased since the Covid outbreak on 2020, but it is still insufficient to help slow down home price growth (which is also being driven up since Covid by loose Federal Reserve policies).
As we would expect, there was no growth in office construction spending in April as the demand for office space has dwindled in a post-Covid world. Lodging is down for the same reason — reduced travel thanks to Covid.
Of course, construction spending will likely skyrocket with Biden’s $8 trillion spending free-for-all. Much of it aimed towards infrastructure spending ($2.3 TRILLION). Mish has an interesting take of what should and should not be done with the spending package.
Let’s see how much of Biden’s spendorama gets through to the actual economy. Or how we are going to pay for $8 trillion in new spending (increased taxes? Increased debt financing?) Or is this Stimulypto?