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Construction spending remains in neutral

September construction spending (one of the least important of the economic indicators given its long lag time) was a bit weaker than expected, but there is no significant trend to be discerned here. Both components of the index have been moving sideways for months now, and the construction sector is now a fairly small part of the overall economy, so there is little of importance in today's news. If anything, it is just one more statistic that disproves the notion of an impending double-dip recession.

Anecdotally, I am seeing and hearing of a lot more remodeling activity than before. Plus, recently I drove past two relatively large housing developments that I had not seen before. And a contractor who earlier this year did an energy retrofit for us reports that he is now absolutely swamped with new business.

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