Dive Brief:
- Construction spending dipped 0.5% between January and February to a seasonally adjusted annual rate of $1.144 trillion, the Commerce Department reported Friday.
- Private nonresidential construction spending fell 1.3% in February, while residential spending rose 0.9%. Within residential, single-family home construction grew 1.2%, and multifamily increased by 0.9%. Public construction slipped 1.7% last month.
- Spending in February was 10.3% higher than February 2015. Construction spending in the first two months of 2016 was 11.2% higher than the same period last year.
Dive Insight:
February's spending results failed to meet expectations, as economists surveyed by MarketWatch predicted a 0.1% rise. The report showed that despite the surging residential sector, the nonresidential segment dragged down overall spending numbers.
The Commerce Department report coincides with the February nonresidential construction starts report from CMD Group, which found most February month-to-month starts were in the negative, including in commercial (-32.2%), heavy engineering (-28.4%), industrial/manufacturing (-31.8%) and even institutional (-2.2%).
February residential construction spending reached its highest rate since October 2007, according to ABC News. The strong results in the sector coincided with the mostly positive housing market reports this month. Builder confidence held steady at a score of 58, housing starts rose 5.2% in February to a 1.18 million annualized rate, new single-family home sales increased 2.0% in February to an annual rate of 512,000, and pending home sales rose 3.5%. However, on the negative side, existing home sales dropped 7.1% last month.
