After falling in the first two months of the year, U.S. construction spending ticked up slightly in March, as an increase in private construction spending offset a drop in public construction spending.
According to figures released Tuesday by the Commerce Department, overall construction spending came in at a seasonally adjusted annual rate of $808.1 billion in March, reflecting a 0.1 percent increase from revised February levels.
Meanwhile, February construction spending, which had initially been reported as showing a 1.1 percent decline, was revised further down to show a 1.4 percent drop.
Most economists had predicted a somewhat more robust 0.5 percent rebound in overall construction spending for March.
"This may well see the 1Q 12 GDP figure initially released at 2.2%, being trimmed down in coming revisions," said Rob Carnell, chief international economist at ING. "However, we would not pay too much attention to any housing and construction data in this first quarter, which is horribly distorted by unseasonal weather and Easter."
Although the overall growth in construction spending remained subdued, private construction spending increased by a stronger 0.7 percent, with both residential and non-residential construction spending up by 0.7 percent.
However, declines in public sector construction spending largely counteracted the private sector growth.
Overall, public sector construction spending was down 1.1 percent for the month, as a 1.6 percent decline in state and local construction spending eclipsed a 3.8 percent increase in federal construction spending.
The declines brought overall public construction spending to the lowest level since February of 2007, with state and local spending reaching the lowest level since November of 2006.
Of the overall public sector spending, education construction spending fell 1.2 percent, while highway construction spending was down 0.8 percent.
by RTT Staff Writer
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