WASHINGTON – U.S. construction spending slipped for the second month in February, pulled down by a drop in single-family home building.
Construction spending fell 0.1 percent in February after a revised 1.7 percent drop in January, the Commerce Department reported.
The result in part reflects bitter winter weather that constrained construction in many parts of the country during the month. Economists are hopeful for a rebound in the spring and summer as the economy strengthens.
Still, the economists at IHS Global Insight called February’s numbers “another poor report” and said in a research note that sluggish construction spending is likely to pull down overall economic growth for the first quarter of 2015.
Last month, the government said the pace of housing starts plummeted 17 percent in February from January’s rate. Home construction slid 56.5 percent in the Northeast and 37 percent in the Midwest, the two regions that endured the brunt of the winter storms.
In last week’s report, private spending on construction of single-family homes declined 1.4 percent – the biggest drop since 2010, noted Gregory Daco, head of U.S. macroeconomics at Oxford Economics. Spending on apartments was up 4.1 percent. Nonresidential construction spending rose 0.5 percent, led by a 5.5 percent jump in hotel construction and a 6.8 percent surge in factory construction.
Total private construction spending, which rose 0.2 percent, was offset by a 0.8 percent retreat in public construction spending. State and local governments cut spending by 1.6 percent. They account for more than 90 percent of government spending on construction. The federal government increased construction spending by 9 percent.
Overall construction spending was up 2.1 percent from February 2014.
The economy added 338,000 construction jobs last year, the most since 2005. Still, damage from the collapse of the housing market lingers: The United States has nearly 1.4 million fewer construction jobs than it had in 2006.
