WASHINGTON — Construction spending dipped 1.7% to a seasonally adjusted estimated annual rate of $856.7 billion in March, the Commerce Department reported Wednesday.
The rate declined from a revised February estimate of $871.2 billion, originally reported as $885.1 billion. The deceleration in the annual rate was not expected by economists polled by Thomson Reuters, who projected a median 0.7% increase.
A very sharp 4% drop in the construction spending rate in January, the steepest since January 1993 when the number began being recorded, combined with the March decline to put the total level at its lowest since it was $855.9 billion in August 2012.
The March mark was still 4.8% above the $817.8 billion estimate for the same month one year ago. Through the first three months of the year, construction spending stood at $181.7 billion, 4.7% above the $173.6 billion spent through the first three months of 2012.
Public construction spending fell 4.1% in March to a $258.3 billion annual rate, from the revised February figure of $269.2 billion. The steep drop put public construction spending at its lowest level since a $256.9 billion rate reported in October 2006.
State and local construction spending dove 4.3% to $235.3 billion, its lowest point since a $234.3 billion rate in March 2006. Federal construction spending dropped 1.7% to a $23 billion annual rate. Highway construction spending fell 5.2%, while education construction spending dipped 2.9%.
Spending on private construction fell 0.6% to a seasonally adjusted estimated rate of $598.4 billion in March, from $602 billion the previous month. Private residential construction ticked up 0.4%, while nonresidential construction dropped 1.5% from February.