Jan. Construction Spending Falls 1.0%

WASHINGTON - Construction spending fell 1.0% in January, a surprise decline that was due entirely to a sharp drop in public spending to the lowest level in three years, data released by the Commerce Department Wednesday morning showed.

Analysts had expected construction spending to rise 0.7% after a small decline in December. With the latest data, December construction was revised up to a 0.1% from the 0.2% decline in the previous estimate, while November spending was revised up to a 1.5% gain from the 0.9% increase previously reported.

Private residential construction spending rose 0.5% in the month following a upward revised 0.7% gain in December, as new home building was up 1.3% based on an MNI calculation. Single-family building rose 1.1%, while multi-family building was up 2.2%. The level of private residential construction, at $476.4 billion, is the highest since August 2007.

Offsetting the gain in new home building, residential construction excluding new homes, which captures home remodeling, fell 1.0% in January after a 0.4% increase in December.

Private nonresidential construction was flat in January after an upward revised 0.3% gain in December. In January, gains in power, communications, manufacturing and office building offset declines in other categories.

Public construction fell 5.0% in January after an upward revised 1.7% decline in December. State and local government spending, the much larger portion of public construction, was down 4.8% after a 2.1% decrease in December, while Federal government construction fell 7.4% in January after a 6.3% gain in December. Public construction, at $268.7 billion, is at its lowest point since March 2014.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.
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