U.S. Construction Spending Unexpectedly Declines for the Second Straight Month in February
Summary
- Construction spending -0.3% m/m in Feb.; +10.7% y/y, the lowest since Sept. ’23.
- Residential private construction rises 0.7% m/m, led by a 1.4% gain in single-family building.
- Nonresidential private construction drops 0.9% m/m, down for the second consecutive month.
- Public sector construction falls 1.2% m/m, w/ both residential & nonresidential public construction down 1.2% m/m.
The value of construction put in place fell 0.3% m/m in February after an unrevised 0.2% decline in January and a downwardly revised 0.9% increase in December (+1.1% previously), according to the U.S. Census Bureau. The February reading was the second successive monthly fall following m/m gains every month in 2023. A 0.7% m/m February increase had been expected in the Action Economics Forecast Survey. The year-on-year rate decelerated to 10.7% in February, the lowest since September 2023, from 11.4% in January. The latest y/y figure was higher than a low of 1.3% in April 2023 and 3.6% in February 2023; nevertheless, having remained below a peak of 16.5% in April 2022.
Private construction was virtually unchanged m/m (9.0% y/y) in February following a 0.05% dip in January (+0.1% initially) and a 0.5% increase in December (+0.8% previously). Residential private construction grew 0.7% (6.3% y/y) in February after a 0.1% uptick in January, registering the third straight m/m gain and the fourth in five months. Single-family building rose 1.4% (17.2% y/y), the 10th consecutive m/m rise, on top of a 0.8% January increase; it was 48.7% of the residential private construction. Home improvement building rebounded 0.2% (-5.3% y/y), the first m/m gain since October, following a 0.4% January decline; it was 36.5% of the residential private construction. Multi-family building, however, slid 0.2% (+6.1% y/y), the fifth m/m slide in six months, after a 0.8% January decrease; it was 14.8% of the residential private construction.
Nonresidential private construction fell 0.9% (+12.6% y/y) in February following a 0.3% decline in January and six successive m/m increases. The February fall reflected m/m drops of almost all nonresidential private constructions. These included amusement & recreation (-2.5%; +9.5% y/y), health care (-1.9%; +10.7% y/y), commercial (-1.7%; +0.9% y/y), lodging (-1.5%; +2.0% y/y), religious (-1.5%; +21.6% y/y), manufacturing (-0.6%; +31.8% y/y), communication (-0.5%; +2.2% y/y), utilities (-0.5%; +6.9% y/y), educational (-0.5%; +21.4% y/y), and office (-0.1%; +3.7% y/y). In contrast, transportation private construction rose 0.4% (4.2% y/y) in February, the fourth m/m rise in five months, after a 0.2% increase in January.
The value of public construction decreased 1.2% (+16.8% y/y) in February after a 0.7% drop in January (-0.9% initially), with declines of 1.2% (+19.9% y/y) in residential public construction and 1.2% (+16.8% y/y) in nonresidential public construction. The February decrease reflected m/m drops of almost all nonresidential public constructions. These included commercial (-5.5%; -3.5% y/y), health care (-3.3%; +8.0% y/y), water supply (-2.3%; +14.4% y/y), educational (-1.8%; +15.4% y/y), amusement & recreation (-0.6%; +21.3% y/y), conservation & development (-0.4%; +6.6% y/y), utilities (-0.4%; +62.3% y/y), office (-0.2%; +17.7% y/y), public safety (-0.2%; +36.1% y/y), and sewage & waste disposal (-0.1%; +11.0% y/y). Notably, spending on highways & streets, which made up 31.0% of public construction spending, fell 1.6% (+18.5% y/y) in February following a 2.0% January drop and nine straight m/m advances. To the upside, transportation public construction grew 0.8% (7.7% y/y) in February, the third consecutive m/m gain, after a 3.0% rise in January.
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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