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Economy in Brief

U.S. Construction Spending Rises Less Than Expected in February
by Winnie Tapasanun  April 1, 2022

• Total construction gains for the 12th consecutive month; Jan. and Dec. revised up.

• Residential private construction rises for the seventh straight month, led by single-family building.

• Nonresidential private construction posts the smallest gain in eight months.

• Public sector construction falls for the third time in four months.

The value of construction put-in-place rose 0.5% m/m (11.2% y/y) in February after upwardly revised increases of 1.6% in January (+1.3% initially) and 1.6% in December (+0.8% previously), according to the U.S. Census Bureau. The February m/m reading was the 12th straight monthly rise. A 1.0% February increase had been expected in the Action Economics Forecast Survey.

Private construction increased 0.8% (14.0% y/y) in February, the seventh consecutive m/m gain, on top of a 1.8% advance in January. Residential private construction rose 1.1% (16.6% y/y) after a 1.7% rise, registering the seventh successive m/m gain. Single-family building grew 2.5% (20.0% y/y), the fourth straight m/m increase, after a 2.6% rise. Multi-family building ticked up 0.1% (7.8% y/y) vs. a 0.1% downtick. Home improvement expenditures, however, slid 0.7% (+14.8% y/y), the first monthly slide since November, following a 0.9% increase.

Nonresidential private construction grew 0.2% (9.7% y/y) in February after a 2.0% gain in January, registering the smallest of eight straight m/m increases. Transportation building rose 2.3% (-0.3% y/y), the third m/m rise in four months. Utilities private construction grew 1.4% (-1.7% y/y) after a 2.3% rise. Lodging construction rose 0.8% (-25.2% y/y) vs. two successive monthly drops. Manufacturing construction increased 0.6% (35.0% y/y), the sixth m/m gain in seven months, on top of an 8.4% rebound. Educational private construction was up 0.2% (16.3% y/y), the smallest of eight straight m/m gains. Communication private construction held steady (-0.7% y/y) following two consecutive monthly declines. Amusement & recreation construction was virtually unchanged (+11.5% y/y) after two consecutive m/m rises. To the downside, commercial building dropped 1.3% (+18.8% y/y) following three straight m/m gains. Religious construction fell 0.7% (-7.7% y/y), the sixth m/m fall in seven months. Heath care private construction declined 0.6% (+9.3% y/y) on top of a 0.9% drop. Office building dipped 0.1% (+6.6% y/y) after slipping 0.1%.

The value of public construction fell 0.4% (+1.5% y/y) in February, the third m/m fall in four months, after a 0.9% rebound in January, with residential public construction up 1.2% (2.7% y/y) and nonresidential public construction down 0.5% (+1.4% y/y). Educational public construction fell 1.3% (-7.9% y/y), the second m/m fall in three months. Spending on highways & streets, which makes up 29.8% of public construction spending, slid 1.3% (+8.3% y/y), the first m/m slide since June. Conservation & development public construction fell 1.3% (+10.1% y/y), the first m/m fall since November. Office public construction declined 0.5% (+7.8% y/y) vs. a 1.6% rebound. Health care public construction fell 0.4% (+16.2% y/y) after having recovered 4.6%. To the upside, water supply construction was up 4.8% (10.5% y/y) and sewage & waste disposal construction was up 2.2% (11.1% y/y). Public safety construction rose 1.8% (-34.3% y/y) after a 1.3% rebound. Commercial public construction recovered 1.7% (-1.5% y/y) after two straight m/m declines. Utilities public construction ticked up 0.1% (18.5% y/y) following two consecutive monthly drops.

The construction spending figures, some of which date back to 1946, can be found in Haver's USECON database. The expectations reading is in the AS1REPNA database.

Construction Put in Place (SA, %) Feb Jan Dec Feb Y/Y 2021 2020 2019
Total 0.5 1.6 1.6 11.2 8.3 5.6 4.3
  Private 0.8 1.8 2.2 14.0 12.3 5.8 2.3
    Residential 1.1 1.7 3.2 16.6 23.3 15.1 -2.0
    Nonresidential 0.2 2.0 0.6 9.7 -2.1 -4.2 7.5
  Public -0.4 0.9 -0.9 1.5 -4.1 4.9 11.0
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