Construction Spending Drops Unexpectedly In February As Public Projects Slow
Construction spending in the U.S. dipped unexpectedly in February after a slowdown in public construction projects, the Census Bureau reported Monday.
Spending dropped 0.3% month-over-month in February despite an uptick in some residential projects, marking the second monthly decline in overall spending after a 0.2% drop in January.
Economists polled by Reuters had predicted a jump of 0.7% month-over-month.
Much of the drag in spending was due to a dip in public construction projects, which fell 1.2%. Educational and highway projects, which are major components of public sector construction spending, were down for the month.
But the private sector saw a decline as well. Spending on nonresidential structures fell across the board by 0.9%, and spending on commercial buildings was off 1.7% for the month.
In response to a tight housing market, builders pushed spending on single-family housing up 1.4% for the month. Multifamily construction edged down 0.2% in February compared to January.
Compared with a year ago, overall U.S. construction spending was up 10.7% in February, and during the first two months of 2024, spending was 11.9% higher than the same period in 2023.
Construction spending has moved mostly upward since the pandemic began, according to Census Bureau data. In 2018, overall spending was below $1.4T annually. As of 2023, overall spending totaled more than $2T annually, including gains funded by infrastructure spending.
