With a Big Boost From Public Work, Construction Spending Rises in February
Non-residential spending reached its highest level in February, due largely to an uptick in the highway and street sector.
Courtesy of U.S. Census Bureau
Construction spending rose in 0.7% in February on a month-to-month basis, according to a report released today by the U.S. Census Bureau. On a yearly basis, overall spending increased 2.9%.
“Construction spending rebounded in February, following widespread severe weather that may have slowed projects in January,” Ken Simonson, chief economist of the Associated General Contractors of America, said in a press release. “Investment remains positive compared to a year ago but the growth rate for all major categories has cooled, while contractors have trimmed hiring and slashed job openings.”
Residential spending rose 1.3% for the month, and 1.6% for the year, mostly spurred by single-family projects. In the non-residential sector, spending was up 0.3% since January and 3.9% since February 2024. The figure was the highest on record, Anirban Basu, chief economist at Associated Builders and Contractors, said in a press release.
“A surge in highway and street spending accounted for more than 40% of the monthly increase, and public sector nonresidential spending is now up more than 6% on a year-over-year basis,” he said. “Unfortunately, private sector spending has not kept pace and is up just 2.5% since last February, a rate of increase slower than economy-wide inflation.”
Going forward, Basu expects challenges currently facing the industry to continue. “The mix of high interest rates, tight lending standards and unprecedented uncertainty regarding trade policy will continue to weigh on private sector construction in the coming months.”
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