March Construction Spending Cools Off

Source: Thinkstock
The U.S. Census Bureau reported this morning that construction spending in March dropped 1.7% to an estimated seasonally adjusted annual rate of $856.7 billion from a downwardly revised estimate of $871.2 billion in February. Compared with March 2012, spending is up 4.8%. For all of 2012, construction spending rose 9.9%, compared with 2011.

The consensus estimate from economists surveyed by Bloomberg News called for a rise of 0.6% in construction spending in March.

Spending on private residential construction fell 0.6% to $294.9 billion, compared with the revised February total of $269.9 billion. Private nonresidential construction fell 1.5% month-over-month, and total private construction spending fell 0.6% to $598.4 billion.

In the private sector, single-family residential construction is 37.6% higher than it was a year ago and multifamily construction is up 52.7% from January 2012. Private commercial construction is up 1% year-over-year, but down 3.1% from February.

In the public sector, total spending is down 5.4% year-over-year, continuing a slide begun in September 2012. Spending on educational facilities fell 2.9% month-over-month and 7.7% from March 2012 spending. Public residential construction rose 13.7% month-over-month, and it is 0.2% lower year-over-year.

Construction spending fell in March as the February estimates were revised higher and private commercial construction fell. A drop in spending on public facilities, especially in educational facilities and roads, is likely a result of the cut to the federal budget known as the sequester.

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