Construction Spending: Yet Another Downside Miss

Bottom Line: Construction spending was lower than expected again in February with negative revisions to January data. Declines were led by slower public construction and health care related construction in the private sector. While some of the miss and negative revision could be related to weather, the trend remains concerning for construction overall. Hurricane-related spending boosted construction spending modestly late in '17, stabilizing the trends a bit, but overall the level of spending and modest downward trend in construction spending remains one weak spot in the economy. Construction Spending ROSE by 0.07% in February, compared with market expectations for an increase of 0.4%. The January estimate was revised modestly lower from 0.84% to -0.04%, while the December estimate was revised modestly higher from 1.2% to 1.6%. Construction spending is now 3.0% ABOVE its year ago level. Residential Construction ROSE by 0.1%, Homebuilding is now 5.5% ABOVE its year ago level. Nonresidential Construction ROSE by 1.5%. Nonresidential construction growth is now 1.1% ABOVE its year ago level. Public Construction FELL by 2.1%, and is now 1.6% ABOVE its year ago level.