Construction Spending Rises in Public Sector

Washington, DC, May 3, 2010–U.S. construction spending rose unexpectedly in March and was the first advance since October, thanks to increased public construction, the Commerce Department said.

The government said construction spending increased 0.2%, the largest gain since October, to an annual rate of $847.3 billion. That followed February’s revised 2.1% drop that was previously reported as a 1.3% fall.

Economists had forecast construction spending falling 0.3% in March.

Public construction spending surged 2.3% in March, the biggest rise since February last year. Investment in private construction spending fell 0.9% to $550.81 billion, the lowest level since January 1999. .

The decline in private construction spending in March was led by private home building, which dropped 1.1%. New home construction contracted in the first quarter of 2010 after two straight quarters of gains, subtracting from overall growth during the period, a government report showed on Friday.

Private nonresidential spending fell 0.7% in March, extending the 1.5% decline in February. Investment in structures has dropped for seven straight quarters.

State and local government investment in construction projects rose 2.5% in March after falling 2 percent in February. Federal construction rose 0.3%.