February construction spending steady, shows solid y/y improvement

Written by Laura Miller

US construction spending in February was mostly steady from January but showed significant gains from last year.

The US Census Bureau estimated total construction spending during the month to be $2.0915 trillion at a seasonally adjusted annual rate (SAAR). While comparable to January’s revised spending estimate of $2.097 trillion, this was a rise of nearly 11% from February 2023.

Construction spending amounted to $298.1 billion in the first two months of the year – 12% ahead of the same period in 2023.

February spending on private nonresidential projects reached a SAAR of $716 billion. While a decline of 0.9% from the month prior, it was nearly 13% higher year over year (y/y).

The largest segments within private nonresidential spending showed similar patterns, according to the Associated General Contractors (AGC) of America. While down 0.6% month on month (m/m), manufacturing construction jumped 32% y/y. Commercial construction was down 1.7% m/m but ticked up 1% y/y. Power, oil, and gas project spending dropped 0.5% m/m while rising 7% y/y.

“There were monthly decreases for nearly all types of nonresidential projects,” pointed out Ken Simonson, chief economist at the Associated General Contractors (AGC) of America.

“But every spending segment increased from a year earlier, suggesting the current downturns may reflect short-term challenges such as severe weather, not fading demand,” he noted.

In February, private residential construction spending inched up 0.7% m/m to a SAAR of $901.1 billion.

Spending on public construction projects was 1.2% higher m/m with a February SAAR of $474.4 billion.

Laura Miller

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