US construction spending falls for second straight month in February
US CONSTRUCTION spending unexpectedly fell in February as strength in single-family homebuilding was more than offset by weaknesses in nonresidential and public projects.
The Commerce Department said on Monday (Apr 1) that construction spending dropped 0.3 per cent after an unrevised 0.2 per cent decline in January. Economists polled by Reuters had forecast construction spending rebounding 0.7 per cent. Construction spending increased 10.7 per cent year on year in February.
Spending on private construction projects was unchanged for a second straight month in February. Investment in residential construction rose 0.7 per cent after gaining 0.1 per cent in the prior month.
Outlays on new single-family construction projects jumped 1.4 per cent, boosted by tight housing supply. Recent government data showed there were 757,000 housing units for sale in the fourth quarter, well below the 1.145 million units before the Covid-19 pandemic. Outlays on multi-family housing projects dipped 0.2 per cent in February, likely as builders worked through a large backlog.
Outlays on private non-residential structures like factories dropped 0.9 per cent. The broad decline in spending was led by a 2.5 per cent plunge in amusement and recreation projects. Investment in healthcare facilities decreased 1.9 per cent while spending on commercial buildings declined 1.7 per cent. Spending on manufacturing construction projects fell 0.6 per cent.
Spending on structures was one of the contributors to the economy’s 3.4 per cent annualised growth pace in the fourth quarter.
SEE ALSO
Investment in public construction projects dropped 1.2 per cent after falling 0.7 per cent in January.
State and local government spending tumbled 1.1 per cent and outlays on federal government projects plummeted 2.1 per cent. REUTERS
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