U.S. Construction Spending Unexpectedly Drops 0.6% In March

(RTTNews) - Partly reflecting a sharp pullback in spending on residential construction, the Commerce Department released a report Friday morning showing an unexpected decrease in U.S. construction spending in the month of March.

The report said construction spending fell by 0.6 percent to annual rate of $966.6 billion in March from the revised February estimate of $972.9 billion.

The decrease came as a surprise to economists, who had been expecting construction spending to increase by about 0.5 percent.

The unexpected drop in total construction spending was partly due to a 0.3 percent decrease in spending on private construction, which dipped to an annual rate of $702.4 billion in March from a revised $704.7 billion in February.

Spending on residential construction showed a significant decrease, tumbling by 1.6 percent to an annual rate of $349.0 billion in March from the revised February estimate of $354.6 billion.

On the other hand, the report said non-residential construction climbed 1.0 percent to an annual rate of $353.4 billion in March from the revised February estimate of $350.1 billion.

The Commerce Department also said spending on public construction fell by 1.5 percent to an annual rate of $264.2 billion in March from a revised $268.2 billion in the previous month.

Spending on state and local construction slumped 1.2 percent to an annual rate of $241.9 billion, while spending on federal construction plunged by 4.9 percent to an annual rate of $22.3 billion.

Despite the monthly decrease, the Commerce Department noted that total construction spending was up by 2.0 percent compared to the same month a year ago.