U.S. Construction Spending Unexpectedly Dips in February; Second M/M Decline in Three Months
Summary
- Total Feb. construction -0.1% (+5.2% y/y); Jan. revised up to +0.4% (from a decline) and Dec. revised up to -0.1%.
- Residential private construction falls 0.6% (-5.7% y/y), down for nine consecutive months, led by a 1.8% drop (-21.4% y/y) in single-family building.
- Nonresidential private construction rises 0.7% (19.4% y/y), up for the ninth time in 10 months.
- Public sector construction declines 0.2% (+12.8% y/y), down for the first time since May, led by a 0.2% easing (+12.8% y/y) in nonresidential public construction.
The value of construction put in place slipped 0.1% m/m in February after a 0.4% gain in January (-0.1% initially) and a 0.1% downtick in December (-0.7% previously), according to the U.S. Census Bureau. The y/y rate decelerated to 5.2% in February, the lowest since February 2021, from 6.9% in January; it was also below an 11.7% y/y high last February. A 0.1% m/m February increase had been expected in the Action Economics Forecast Survey. The Fed's tightening of monetary policy is continuing to weigh on the housing market.
Private construction was virtually unchanged m/m (+3.3% y/y) in February after a 0.2% increase in January (+0.04% initially) and a 0.3% decline in December (-0.8% previously). Residential private construction slid 0.6% (-5.7% y/y), the ninth straight monthly slide, after a 0.2% January decline (-0.6% initially). Single-family building fell 1.8% (-21.4% y/y), the ninth successive m/m fall, after a 1.5% January drop. Multi-family building, however, rose 1.4% (22.2% y/y), the eighth m/m rise in nine months, on top of a 0.2% January increase. Home improvement building held steady m/m (8.0% y/y) following three consecutive monthly gains.
Nonresidential private construction increased 0.7% (19.4% y/y) in February, the ninth m/m gain in 10 months, after a 0.9% rebound in January. The February increase reflected m/m rises of 2.7% (53.8% y/y) in manufacturing construction, 1.5% (-5.6% y/y) in utilities private construction, 0.5% (15.4% y/y) in office private building, 0.2% (35.0% y/y) in lodging construction, and 0.2% (34.5% y/y) in transportation private building. To the downside, the following nonresidential private constructions posted their m/m declines in February: religious (-1.2%; +6.1% y/y), educational (-1.1%; +14.7% y/y), commercial (-0.6%; +21.5% y/y), amusement & recreation (-0.4%; +12.6% y/y), health care (-0.3%; +11.4% y/y), and communication (-0.1%; +4.7% y/y).
The value of public construction fell 0.2% (+12.8% y/y) in February, the first m/m fall since May, after a 0.9% rise in January (-0.6% initially), reflecting a marginal 0.1% increase (13.4% y/y) in residential public construction and a 0.2% decline (+12.8% y/y) in nonresidential public construction. The following nonresidential public constructions registered their m/m decreases in February: commercial (-1.8%; +21.7% y/y), water supply (-1.1%; +16.7% y/y), educational (-0.9%; +5.2% y/y), conservation & development (-0.9%; +25.8% y/y), transportation (-0.7%; +4.8% y/y), office (-0.6%; +7.7% y/y), utilities (-0.5%; +19.3% y/y), and amusement & recreation (-0.4%; +7.6% y/y). In contrast, the following nonresidential public constructions increased m/m in February: public safety (2.6%; 11.3% y/y), sewage & waste disposal (0.5%; 19.5% y/y), and health care (0.2%; 14.9% y/y). Notably, spending on highways & streets, which makes up 30.9% of public construction spending, rose 0.3% (18.8% y/y), the third consecutive m/m rise, after a 1.1% January increase.
The construction figures can be found in Haver's USECON database. The expectations figure is from the Action Economics Forecast Survey in AS1REPNA.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has ~20 years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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