Construction spending edged down 0.5% in February from January’s total to a $1.14-trillion annual rate, but rose 10.3% from the year-earlier level, the Commerce Dept. has reported.
Commerce’s U.S. Census Bureau said in an April 1 report that the value of nonresidential construction projects completed in February declined 1.4%, to a $690.3-billion seasonally adjusted annual rate but climbed 10.1% from the February 2015 level.
Residential construction put in place in February totaled a $453.7- billion rate, a slight 0.9% pickup from January but a strong 10.5% gain year over year.
Eight of the 16 nonresidential sectors recorded month-to-month increases in February, according to Census Bureau data. Office construction was the strongest, climbing 3.8% from January and 25.3% year over year, to a $62.4-billion annual rate.
Also posting robust gains from February 2015 were lodging, up 30.1%; highways and streets, up 24.5%; and commercial, up 11%.
Only two categories recorded year-over-year downturns: public safety and conservation and development.
The Census Bureau also said that February’s private-sector construction slipped 0.1% from the previous month’s level, to an $846.2-billion annual rate but increased 10.6% from the year-earlier level.
Public construction fell 1.7% month to month, to a $297.8-billion annual rate, but was up 9.2% year over year.
Ken Simonson, Associated General Contractors of America's chief economist, said in a statement that the spending report and the most recent Bureau of Labor Statistics construction unemployment figures "confirm that demand for construction is robust and well-balanced among residential, private nonresidential and public segments."
Anirban Basu, Associated Builders and Contractors chief economist, said that the month-to-month spending decline isn't worrisome. In a statement, Basu cited "particularly harsh" February weather in the MidAtlantic and other regions "that appears to have had undue effect on construction spending data."
He also said that much of the nonresidential construction February downturn was due to a drop in manufacturing projects' volume, but added that a recent manufacturing index report indicated that "domestic manufacturing is now expanding for the first time in seven months."