New Construction Spending Slides in February

The U.S. Census Bureau reported Friday morning that construction spending in February slipped by 0.5% to an estimated seasonally adjusted annual rate of $1.144 trillion from the upwardly revised estimate of $1.150 trillion in January. Compared with February 2015, spending is up 10.3%.

For 2015, new construction spending rose 10.5% at an estimated total of $1.097 trillion, compared with the 2014 total of $993.4 billion. For the first two months of 2016, construction spending has totaled $157.1 billion, 11.2% higher than spending in the same period last year.

The consensus estimate by economists surveyed by Bloomberg News called for a rise of 0.2% in construction spending for February.

The seasonally adjusted annual rate of spending on private residential construction rose 0.9% to $447.95 billion, compared with the revised January total of $443.79 billion. Private nonresidential construction slipped 1.3% month-over-month and total private construction spending ticked down 0.1% to $846.21 billion, compared with a revised January total of $847.22 billion.
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In the private sector, single-family residential construction is 10.6% higher than it was a year ago and multifamily construction is up 24.1% from February 2015. Private, nonresidential construction is up 10.6% year over year.

In the public sector, seasonally adjusted total spending fell 1.7%, compared with January, and is now 9.2% higher compared with February 2015. Spending on educational facilities slipped 4.2% month over month, but it is up 5.2% from February 2015 spending. Public residential construction fell 2.8% month over month and remains down 5.2% compared with February 2015.

The good news is that spending on new housing is up sharply year over year. The not-so-good news is that nonresidential construction spending is down month over month, though still up more than 10% year over year. Total public and private construction spending is 10.3% compared with February 2015.