The total value of U.S. construction put in place in March slipped 0.2%, surprising economists whose consensus forecast expected increased spending. Significant revisions to the previous month revealed spending hit an all-time high in February.
The Associated General Contractors' analysis of the numbers points out that, "Construction spending is at record levels for the second straight month in March [in spite of the momth's slip] and is up 4.9% for the first three months of year compared to the same period in 2016."
The dip in March was due to a 0.9% drop in public construction spending, where the biggest highway-and-street category was close to flat (0.5%) and the total was weighed down by drops in hefty categories such as educational (-2.0%), transportation (-4.0%) and sewage and waste disposal (-2.7%).
Slipping private nonresidential outlays were offset by gains in residential spending, holding total private spending flat for the month. The largest private nonresidential sectors had a tough month. The largest category, power construction, slipped 0.6% and the Top-4 categories commercial and office construction were both down (-3.2% and -2.6%, respectively). Manufacturing construction remained near steady at 0.5% growth for the month.
Private residential spending rose 1.2% in March, as new multifamily spending increased 2% and single-family was up 0.3%. Multifamily construction spending and home improvement spending each reached record highs in March.
Most nonresidential categories declined in March after warmer February weather pulled activity forward.
Structures, business investment and residential were bright spots through the first quarter of 2017. The average value of construction put in place through the first three months of the year is 4.6% above that of 2016, with spending on private construction growing 8.4%, and the value of public construction down 6.6%.
The total value of construction put in place in the U.S. is at record levels for the second straight month in March, exceeding even the pre-recession peak. In spite of the 0.2% slip in March, U.S. construction spending is up 4.9% for the first three months of year compared to the same period in 2016.Wells Fargo Economics Group
