U.S. construction spending falls in January
11:39 am Wednesday, March 01st, 2023
WASHINGTON(Reuters) – U.S. construction spending unexpectedly fell in January as investment in single-family homebuilding continued to decline.
The Commerce Department said on Wednesday that construction spending dipped 0.1% in January after dropping 0.7% in December. Economists polled by Reuters had forecast construction spending rising 0.2%. Construction spending increased 5.7% on a year-on-year basis in January.
Spending on private construction projects was unchanged after decreasing 0.8% in December. Investment in residential construction fell 0.6%, with spending on single-family housing projects dropping 1.7%. Outlays on multi-family housing projects rose 0.4%, boosted by strong demand for rental housing.
The housing market has been hammered by the Federal Reserve’s aggressive monetary policy tightening, with residential investment contracting for seven straight quarters, the longest such stretch since 2009.
There are, however, signs that the housing market is stabilizing, with pending home sales rising by the most in more than 2-1/2 years in January and new home sales hitting a 10-month high. But mortgage rates have resumed their ascent, which could delay a turnaround.
Outlays on private non-residential structures like gas and oil well drilling increased 0.9% in January. Spending on public construction projects fell 0.6% after slipping 0.2% in December. Investment in state and local government construction projects tumbled 1.4%, while federal government construction spending surged 8.6%.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)
