March Construction Numbers Are Out–But February’s Hold More Insight

The Commerce Department said today that construction spending dropped in March–but the news was offset by a surprise revision to February’s numbers.

The revision showed an 0.4 percent increase in construction in February–a vast difference from the original 0.3 percent decline that had been reported.

And yet, spending fell 1.1 percent in March from the month before; total construction spending is down 3.4 percent from last year, MarketWatch reports.

Residential spending didn’t do so well in March, either.

  • Private residential construction declined 4.6 percent from February to March–hitting its lowest level since the department began calculating these statistics in 1993, according to Forbes.
  • For the year, residential
    project spending is down 19.9 percent.

However, February’s residential building numbers were revised to show a 0.2 percent increase–not the originally estimated 0.9 percent drop.

We’re used to news of residential project spending declining–and it’s hard to say that a blip on the radar is a sign that the market is improving.

But still, February’s revisions are intriguing.

According to AP, residential construction had declined for 23 straight months before the small increase in February–and yes, construction declined again in March, but could the February growth be a sign that recovery is near?

Private, nonresidential project spending is up–by 1.9 percent, and up 15.4 percent from last year–thanks to communications and lodgings projects.

Yep, that’s right: Lodgings. A sector that includes hotels, motels, resorts and cabins.

If temporary housing can grow, couldn’t residential building be ready for an increase? And could February’s revision be an early indicator that one is coming? Will April’s numbers show residential growth?
 
It’s a possibility. After all, why should the hotel industry have all the fun?