Construction Spending Stalled for Second Month

Construction spending continued to have a hard time getting out of the 2018 starting blocks in February. Overall spending from both the public and private sectors did manage a tiny increase after achieving no change from December to January, but most specific categories of spending were down for the month.

The Census Bureau said spending in February was at a seasonally adjusted annual rate of $1.273 trillion, an 0.1 percent increase from $1.273 trillion in January.  The January number was a small upward revision from the original $1.263 trillion estimate.  The months spending was up 3.5 percent when compared to February 2017.

On a non-adjusted basis, spending in February was estimated at $88.280 billion compared to $88.023 billion the previous month.  Year to date spending in 2018 is running 4.4 percent ahead of the first two months of 2017.

February spending in the private sector was at a seasonally adjusted annual rate of $982.0 billion, up 0.7 percent from $974.8 billion in January, a revision from $962.733 billion, and deepening the 0.5 percent January downturn.  Spending in February was 3.4 percent higher than in February 2017.

Residential construction rose 0.1 percent for the month to an annual rate of $55.400 billion which is a 5.5 percent year-over-year gain.  New single-family construction was estimated at an annual rate of $281,800, 0.9 percent higher than the January estimate of $279,222 and 9.5 percent ahead of February 2017.  New multi-family construction moved up 1.2 percent to 63.843 billion pulling ahead of the same month in 2017 by 0.9 percent.

On a non-adjusted basis residential spending was estimated at $38.041 billion with $18.713 billion of the total spent on single family construction. Residential spending during the first two months of the year is up 6.8 percent from the same period in 2017 and single-family spending is up 9.5 percent.  Multi-family construction spending consumed $4.901 billion in February, an 0.2 percent year-to-date gain.

Non-residential spending increased 1.5 percent month-over-month.  The largest gainers were spending on commercial and on religious construction.

Public spending was the bright spot in the January spending report, but became a drag in February, declining by 2.1 percent.  The total spending on an annualized basis was $291.109 billion, putting it 1.6 percent ahead of a year earlier.  Spending declined in every category except for construction to provide water supplies.    Non-adjusted spending however is running 7.0 percent head of the first two months of 2017 and residential spending, while declining 0.7 percent on a seasonally adjusted basis from January to $6.900 billion, is up 9.2 percent on a year-to-date basis.