U.S. construction spending took a big hit in the month of February, according to figures released Monday by the Commerce Department, with revised January figures also showing a much larger than previously reported decline.
Commerce Department estimates put overall U.S. construction spending at a seasonally adjusted annualized rate of $808.9 billion, a 1.1 percent drop from revised January estimates.
The steep monthly drop in February marks the largest drop in overall construction spending since July of 2011.
Furthermore, initial figures which had shown a 0.1 percent drop in construction spending in January were revised to show a 0.8 percent decline.
The precipitous drop in construction spending in February came as a surprise to economists, who had forecast a rebound in the construction market, expecting to see a 0.7 percent increase.
Private construction spending cutbacks contributed to the decline, falling by 0.8 percent overall. While the private residential sector held relatively level, private non-residential spending fell by 1.6 percent.
Overall public sector construction spending also showed a significant decrease, falling by 1.7 percent. The decrease largely reflected a 2.1 percent drop in state and local government spending.
One bright spot for the construction sector came in the form of a 1.9 percent increase in federal construction spending, though that marks only a small fraction of the overall market.
Of the overall public construction spending, educational construction fell by 2.5 percent, while highway construction spending fell by 2.6 percent.
by RTT Staff Writer
For comments and feedback: email@example.com