WASHINGTON—U.S. construction spending barely rose in March as a moderate increase in outlays on private projects was partially offset by a further decline in public spending.
The Commerce Department said on Monday that construction spending edged up 0.1 percent after increasing 0.5 percent in February. Economists polled by Reuters had forecast construction spending would accelerate 0.7 percent. Construction spending increased 11.7 percent on a year-on-year basis in March.
The government reported last week that the economy contracted at a 1.4 percent annualized rate in the first quarter amid record imports. While investment in residential construction grew last quarter, spending on nonresidential structures like gas and oil well drilling fell for a fourth straight quarter.
Spending on private construction projects gained 0.2 percent in March after rising 0.7 in February. Investment in residential construction increased 1.0 percent. Single-family homebuilding spending rose 1.3 percent, while outlays on multi-family housing projects dropped 0.5 percent.
Residential construction is being underpinned by strong demand for housing, though momentum could slow, with 30-year fixed mortgage rates soaring above 5 percent.
Investment in private non-residential structures declined 1.2 percent in March. Spending on public construction projects fell 0.2 percent after dipping 0.1 percent in February. Outlays on state and local government construction projects decreased 0.5 percent, offsetting a 2.4 percent increase in federal government spending.
