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
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