US construction spending falls for second straight month in February
WASHINGTON, April 1(Reuters) – U.S. 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 reported on Monday that there was a 0.3% decrease in construction spending in February, following January’s steady 0.2% decline. This contrasts with the expectations of economists surveyed by Reuters, who had anticipated a 0.7% rebound in construction spending. Nonetheless, year-on-year data for February showed a 10.7% increase in construction spending.
In February, private construction project spending remained stagnant for the second consecutive month. Residential construction investment experienced a 0.7% increase, a slight rise from the 0.1% gain in the previous month. There was a notable 1.4% surge in outlays on new single-family construction projects, driven by the tight housing market. Government data from the fourth quarter indicated that the housing units available for sale stood at 757,000, significantly lower than the pre-COVID-19 pandemic level of 1.145 million units. However, investment in multi-family housing projects slightly declined by 0.2% in February, possibly due to builders addressing a substantial backlog.
Spending on private non-residential structures, such as factories, fell by 0.9%. This overall downturn in spending was led by a sharp 2.5% drop in amusement and recreation projects. There was also a 1.9% decrease in investment in healthcare facilities and a 1.7% reduction in spending on commercial buildings. Additionally, spending on manufacturing construction projects declined by 0.6%.
Public construction project investment also decreased, falling 1.2% following a 0.7% drop in January. Spending by state and local governments saw a 1.1% decline, while federal government project outlays experienced a significant 2.1% decrease.
