Dive Brief:
- Construction spending rose 0.3% in March to a seasonally adjusted annual rate of $1.14 trillion, up from the revised rate of $1.13 trillion in February, the Commerce Department reported Monday.
- Private residential construction surged 1.6% in March, while nonresidential construction spending increased 0.7%. Within residential, multifamily building skyrocketed 5.6%, and single-family remained unchanged. Public construction fell 1.9% in March.
- March construction spending was 8.0% higher than March 2015, and spending in the first three months of 2016 was 9.1% higher than the same period last year.
Dive Insight:
March's spending results once again failed to meet expectations, as economists surveyed by MarketWatch predicted a 0.7% rise. The report revealed that gains in residential and nonresidential construction offset the continued drop in the public sector.
The positive Commerce Department report coincides with the March CMD nonresidential construction starts report, which found the value of nonresidential starts shot up 18%. CMD reported that all categories in nonresidential building saw gains in March.
However, the flat single-family spending results and surging multifamily sector contradicts some economists' predictions that multifamily will start to slow down this year, and that 2016 will see single-family outpace multifamily for the first time since the recession. March housing reports were mostly mixed, as builder confidence remained unchanged at 58, housing starts dropped 8.8% in March, existing home sales rose 5.1%, new home sales slipped 1.5%, and pending sales inched up 1.4%.
