Construction Spending Dipped in September but Still Outpaced Last Year
The Fed advises investors and homebuyers not to worry about small September spending decrease.
According to the latest press release from the Department of Commerce’s US Census Bureau, construction spending dipped slightly from August to September 2014.
However, The Federal Savings Bank does not believe that the 0.4 percent decrease from August’s spending levels is a cause for concern. The total spending was still high at $950.9 billion, representing a respectable 2.9 percent increase from September 2013.
Total spending for January to September of 2014 grew 6.1 percent compared to 2013, and the overall economy grew 3.5 percent from July to September. The Fed also pointed to both of these facts as further evidence that investors and home buyers should not be concerned about the small dip in spending that occurred in September 2014.
One area where spending did improve slightly was residential construction. Here there was actually a 0.4 percent increase in September for a total of $349.1 billion, fueled mainly by single family construction.
Although economists have been disappointed by the weak spending exhibited in September, they remain optimistic that this dip is temporary. The Fed is also anticipating future growth, due to positive recent jobs numbers that typically lead to increased demand for loans and for home construction.
Decreased Spending on Individual Projects a Good Thing
While reduced construction spending in the industry as a whole is considered a warning sign of potential economic trouble, cutting spending on an individual project can be highly beneficial to construction firms and their lenders.
At ECL Software, we offer specialized Construction Management Information System software that can help reduce costs on individual projects in several ways:
- Reduced Overhead: First and foremost, our CMIS helps to decrease the amount of time and energy employees must spend managing a construction project. It collects all vital functions from bidding and contracts to payroll and accounting in one single user-friendly system.
- Fewer Errors: As a single-entry system, ECL’s CMIS not only saves time that would otherwise be wasted on data entry, but also helps to prevent errors. Once information such as contractor contact info, cost estimates, payroll specifications, etc. are entered accurately, that information is automatically available in every part of the system where it is required. The system also connects project progress to spending so that you don’t risk overpaying suppliers or getting underpaid by clients.
- Fewer Surprises: Our CMIS has the most detailed work in process reporting system in the industry, providing the ability to track over 1,000 data points. This helps to ensure that you always have an accurate, real-time understanding of the status of all aspects of a project to help avoid costly delays or work stoppages.