US Supply Constraints Hold Back The Recovery

Source: Macrobond, ING

Construction facing the same challenges = inflation pressures

Meanwhile, construction spending rose 0.2% month-on-month in April versus the 0.5% consensus, but March's figure was revised from 0.2% to +1% so on balance, the level of activity is ahead of expectations. Residential construction rose 1% while non-residential contracted 0.5% given the uncertainty over the need for office space and constraints on local government spending. Similarly to the manufacturing sector there are supply constraints  - the cost of lumber and the ongoing problem of finding workers – so we wouldn’t be surprised to see the rate of activity slow. Amid robust demand, this means house prices are likely to remain supported.

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Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...

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