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Construction activity relatively stable but weak

November construction spending was a bit stronger than expected, and prior months were revised upwards. This changed the picture from one of a bit of emerging weakness into one of relatively stable activity. As I eyeball this chart, it strikes me that construction spending has been relatively flat for a year or so. I doubt we'll see much change in the months ahead, but eventually (within a year?) this sector of the economy will be overdue for some very strong growth.

UPDATE: The following two charts show lumber futures prices and an index of major homebuilders' stock prices, respectively. Both suggest some firming in the construction sector. Lumber prices are now up 115% from their March '09 lows, and homebuilders' stocks are up 137% over the same period. At the very least these charts strongly suggest that we have seen the worst of the news for the construction sector.

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