Construction spending tumbled in February as spending on residential projects fell sharply.
Total construction spending declined by 0.1 percent in February compared to the prior month, according to data released Monday by the Commerce Department.
The January figure, however, was revised up to indicate that construction spending rose 0.4 percent. The preliminary estimate had spending falling by 0.1 percent in January.
Economists had expected spending to be flat with January’s preliminary figure. When compared against the initial January estimate, February’s spending was up 2.2 percent.
The December spending figure was also revised up, indicating that spending has been higher than was thought for the past few months. In November, spending surged 1.8 percent after dipping in October.
Residential construction fell by 0.6 percent. Spending on new single-family projects dropped by a sharp 1.8 percent. On a year-over-year basis, private residential construction spending is down 5.7 percent. Private sector spending on residential construction peaked in May of 2022 and has since declined 9.8 percent.
Nonresidential construction climbed 0.4 percent, with a 0.7 percent increase in private sector spending and a 0.2 percent decline in government spending. Private sector outlays for office construction rose 0.5 percent and spending on hotels and motels rose 0.2 percent. Spending on manufacturing plants was up 2.7 percent and spending on power facilities was up 1.5 percent. Spending was down for commercial, health care, and education projections.
Non-residential spending is up 19.4 percent year-over-year and is at a new high. Public spending is up 12.8 percent year-over-year and near its peak.