Nonresidential construction spending fell 1.4 percent in February, according to analysis of U.S. Census Bureau data by Associated Builders and Contractors (ABC).
Spending in the sector totaled $690.3 billion on a seasonally adjusted, annualized basis in February. It’s a slight step back from January’s figure but is still 10.1 percent higher than February 2015.
“February’s weather was particularly harsh in certain parts of the country, including in the economic activity-rich Mid-Atlantic region, and that appears to have had an undue effect on construction spending data,” says ABC chief economist Anirban Basu. “February data are always difficult to interpret, and the latest nonresidential construction spending figures are no different. Seasonal factors have also made state-level data very difficult to interpret.”
“Beyond meteorological considerations, there are other reasons not to be alarmed by February’s decline in nonresidential construction spending,” he adds. “Today’s positive construction employment report indicates continued economic growth. Moreover, much of the decline in volume was attributable to manufacturing, but the ISM manufacturing index recently crossed the threshold 50 level, indicating that domestic manufacturing is now expanding for the first time in seven months.”
Eight of the 16 nonresidential subsectors experienced spending decreases in February, though almost half of the total decline is attributable to the 5.9 percent decline in manufacturing-related spending.