| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 0.4% | 0.1% to 0.5% | 0.7% | -0.2% | -0.5% |
| Year over Year | 2.9% | 3.3% |
Highlights
U.S. construction spending bounced back in February by more than expected, jumping 0.7 percent compared to expectations for a 0.4 percent rise in the Econoday survey of forecasters. January was revised to a 0.5 percent decline from December (previously reported at -0.2 percent).
The estimated level of construction spending in February is 2.9 percent higher than February 2024.
Private construction spending in February rose 0.9 percent from January. Residential construction spending surged 1.3 percent and non-residential was up 0.4 percent.
Public construction spending saw a 0.2 percent uptick from January.
The estimated level of construction spending in February is 2.9 percent higher than February 2024.
Private construction spending in February rose 0.9 percent from January. Residential construction spending surged 1.3 percent and non-residential was up 0.4 percent.
Public construction spending saw a 0.2 percent uptick from January.
Market Consensus Before Announcement
Expected up 0.4 percent in February after declining by 0.2 percent in January.
Definition
The dollar value of new construction activity on residential, non-residential, and public projects. Data are available in nominal and real (inflation-adjusted) dollars.
Description
Construction spending has a direct bearing on stocks, bonds and commodities because it is a part of the economy that is affected by interest rates, business cash flow and even federal fiscal policy. In a more specific sense, trends in the construction data carry valuable clues for the stocks of home builders and large-scale construction contractors. Commodity prices such as lumber are also very sensitive to housing industry trends.
Businesses only put money into the construction of new factories or offices when they are confident that demand is strong enough to justify the expansion. The same goes for individuals making the investment in a home.
A portion of construction spending is related to government projects such as education buildings as well a highways and streets. While investors are more concerned with private construction spending, the government projects put money in the hands of laborers who then have more money to spend on goods and services.
On a technical note, construction outlays for private residential, private nonresidential, and government are key inputs into three components of GDP--residential investment, nonresidential structures investment, and the structures portion of government expenditures.
That is why construction spending is a good indicator of the economy's momentum.
Businesses only put money into the construction of new factories or offices when they are confident that demand is strong enough to justify the expansion. The same goes for individuals making the investment in a home.
A portion of construction spending is related to government projects such as education buildings as well a highways and streets. While investors are more concerned with private construction spending, the government projects put money in the hands of laborers who then have more money to spend on goods and services.
On a technical note, construction outlays for private residential, private nonresidential, and government are key inputs into three components of GDP--residential investment, nonresidential structures investment, and the structures portion of government expenditures.
That is why construction spending is a good indicator of the economy's momentum.
