Jump in Nonresidential Construction Spending not Expected to Stick

Total construction spending fell 0.9 percent in February with downward revisions to December and January. Residential construction spending fell 4.1 percent. Nonresidential construction spending increased 0.5 percent, but we do not expect the gain to stick. Public construction spending rose 0.8 percent.

Residential Construction Spending Continued to Fall

Total construction spending was down 0.9 percent and is now down 10 percent year-over-year. Much of the decline continued to be in residential construction spending which fell 4.1 percent and was down 29.2 percent year-over-year. Single family residential spending fell 10.9 percent on the month and multifamily was down 2.1 percent. Home improvements increased 1.9 percent on the month, but are down 14.3 percent from a year ago.

Nonresidential Surprise Gain is not Expected to Stick

Nonresidential construction spending rose 0.5 percent with gains in both private and public construction spending. Private nonresidential construction spending rose 0.3 percent on the month with lodging and manufacturing increasing. Public nonresidential construction spending rose 0.8 percent with gains in power and conservation and development. With continued weak economic growth, nonresidential spending should decline in coming months.