March Construction Spending Up 0.3%

Construction spending in March rose by 0.3 percent from February and by nearly 4 percent from a year ago, the Census Bureau reported Monday.

The report said March construction spending came in a seasonally adjusted annual rate of $1,834.7 billion, 0.3 percent higher than the revised February estimate of $1,829.6 billion and 3.8 percent higher than a year ago ($1,768.2 billion). During the first three months of this year, construction spending totaled $403.3 billion, 4.3 percent higher than the $386.7 billion for the same period in 2022.

Private Construction

Spending on private construction rose to a seasonally adjusted annual rate of $1,435.1 billion, 0.3 percent higher than the revised February estimate of $1,430.8 billion. Residential construction, however, fell to a seasonally adjusted annual rate of $827.7 billion in March, 0.2 percent lower than the revised February estimate of $829.1 billion. Nonresidential construction rose to a seasonally adjusted annual rate of $607.4 billion in March, 1.0 percent higher than the revised February estimate of $601.6 billion.

Public Construction

The estimated seasonally adjusted annual rate of public construction spending rose to $399.6 billion,0.2 percent higher than the revised February estimate of $398.8 billion. Educational construction rose to a seasonally adjusted annual rate of $86.9 billion, 0.7 percent higher than the revised February estimate of $86.3 billion. Highway construction fell to a seasonally adjusted annual rate of $121.7 billion, 0.1 percent lower than the revised February estimate of $121.8 billion.

“The improvement in overall spending masks diverging trends between the residential and nonresidential sectors,” said Charlie Dougherty, Economist with Wells Fargo Economics, Charlotte, N.C. “Residential outlays fell 0.2% during the month, the 10th straight monthly decline. Residential spending is running 9.8% below prior year levels.”

Dougherty added single-family activity “continues to be a significant drag on total spending. Single-family spending dropped 0.8% in March, which equates to a 22.9% year-over-year decline.”