WASHINGTON — Construction spending fell dramatically by 1.7% in March, much lower than the expected 0.5% gain, mainly due to a large 2.1% decline in private construction, data released by the Commerce Department Tuesday morning showed.
Analysts surveyed by MNI had expected total construction spending to rise by 0.5%, adding to February's 0.1% gain. February construction was revised up sharply to a 1.0% gain from a 0.1% rise, while January was also revised up significantly to a 1.7% rise from the flat reading previously reported.
This will be the first decline seen since July 2017, when it declined by 0.9%. The last time there was a larger decline was in April of 2017, when it saw a 1.8% decrease in the month. This decline is likely attributed to the bad weather seen in March, preventing further construction in the month.
Private nonresidential construction fell by 0.4% in March. The categories within were mixed, with the decreases in lodging, commercial, health care, and manufacturing outweighing the increases in all other categories.
Adding to the 0.4% decline in in nonresidential private construction, private residential construction fell significantly by 3.5% in the month, the largest decline since April 2009. Home building ex. new homes, also known as remodeling, saw a large 8% decline, according to an MNI calculation.
Also based on an MNI calculation, new homes fell by 0.8%. Single-family building declined by 0.4%, while multi-family building posted a 2.7% decrease from February.
Public construction spending was flat in the month, after February saw an upward revision to a 0.1% gain from the 2.1% decline previously reported.
The flat reading for public construction spending was due in part to Federal construction spending rising by 2.2% to the highest value seen since September 2011, which worked to offset the 0.3% decline in state and local spending.
