A Frigid February Catches up to Construction Spending

Total private residential construction spending decreased in February after three consecutive months of growth. The unusually cold winter may have finally caught up to total residential spending and contributed to a slight month-over-month decline. Total private residential construction spending dropped to a seasonally adjusted annual rate of $360.4 billion according to the latest Census estimates. The current reading is a decrease of 0.8% from the revised January estimate, but 13.5% higher than one year ago.

Month-over-month single-family spending decreased by 1.1% as there was some weakness in the value of housing units started. The home improvement category decreased by 1.3%. Multifamily construction rebounded from a drop in January with a strong month-over-month increase of 2.6%.

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The figures show significant improvements in residential construction spending for all categories from the prior year. From February 2013, on a 3-month moving average basis, construction spending in single-family increased by 18.3%, multifamily increased by 29.9%, and remodeling increased by 11.1%.

Although housing starts were down slightly in February, less weather-dependent permits were up almost 8% to 1,018,000. As the weather improves construction spending should pick up provided key supply chain issues, which remain a concern for many builders, do not restrict growth.



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