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March Construction Spending Falls 0.6%; Q1 2015 Up 3.2% Over Prior Year

This article is more than 8 years old.

U.S. construction spending fell in March compared to February as both private-sector and government construction declined. However, spending was up for the first quarter of 2015 compared to the same period last year.

Construction spending declined 0.6% from February to a seasonally adjusted annual rate of $966.6 billion in March, the Commerce Department said Friday. That figure is 2% above the estimate in March 2014, when (seasonally adjusted, annual) construction spending stood at $947.3 billion. The March data beat expectations of economists surveyed ahead of the release by Bloomberg, who forecast construction spending  would rise 0.4%.

Despite the monthly decline for March, the first three months of 2015 saw construction spending reach $206.7 billion, 3.2% above the $200.4 billion spent in the first quarter of 2014.

In March spending on private construction–which accounts for more than 70% of all construction spending–fell 0.3%, to a seasonally adjusted annual rate of $704.7 billion. An increase in construction of commercial buildings, private schools, lodging and other non-residential private projects was offset by a slight decrease in construction of new single-family homes and apartments. Residential construction, at a seasonally adjusted annual rate of $349 billion, was 1.6% below February’s level, while non-residential construction stood at $353.4 billion in March, 1% above February's pace.

Public construction fell by 1.5% in March, to a seasonally adjusted annual rate of $264.2 billion. Educational construction stood at $58.4 billion, 2.2% below February's rate. Highway construction was at a seasonally adjusted annual rate of $78 billion, 2.4% below February.

The Commerce Department survey of construction spending accounts for work done each month on new structures, or improvements to existing structures, for both the public and private sectors. Estimates include the cost of labor and materials, architectural and engineering works, overhead, interest and taxes paid during construction, and contractor’s profits.