US construction spending rebounds in March on non-residential structures

US construction spending increased more than expected in March, boosted by investment in non-residential structures, but single-family homebuilding remained depressed amid higher mortgage rates.

The Commerce Department said on Monday (May 1) that construction spending rose 0.3 per cent in March after declining 0.3 per cent in February.

Economists polled by Reuters had forecast construction spending gaining 0.1 per cent. Construction spending increased 3.8 per cent on a year-on-year basis in March.

Spending on private construction projects rebounded 0.3 per cent after dropping 0.7 per cent in February. Outlays on private non-residential structures like gas and oil well drilling surged 1.0 per cent in March. Non-residential spending is helping to keep business investment barely afloat.

Investment in residential construction fell 0.2 per cent, with spending on single-family housing projects dropping 0.8 per cent. Outlays on multi-family housing projects climbed 0.4 per cent, continuing to be supported by demand for rental housing.

Though residential investment has contracted for eight straight quarters, the longest such streak since the collapse of the housing bubble triggered by the 2007-2009 Great Recession, the pace of decline is slowing. The decline in the first quarter was the smallest in a year.

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Spending on public construction projects rose 0.2 per cent after jumping 1.1 per cent in February. Investment in state and local government construction projects increased 0.3 per cent, while federal government construction spending declined 0.7 per cent. REUTERS