March Construction Spending Shows Gains: Another Boost for the Economy

After two months of declining spending, builders finally began to increase spending on construction projects. The Commerce Department released its monthly report and found that construction spending ticked up 0.1% in March. March’s gain resulted in construction spending at a seasonally adjusted annual rate of $808.1 billion. Last March, construction spending hit a 12 year low of $762.6 billion, resulting in a year over year increase of 6%  for March.
Economists, however, are still not convinced of when construction spending is going to be back to healthy levels. One of the biggest drags on construction growth is government construction work, which fell 1.1% to the slowest pace since February 2007. State and local goverments led the way in the reduction in construction spending, with levels not seen since November 2006. Meanwhile, Federal spending increased 3.8%. Private, nonresidential projects saw in increase in construction spending of 0.7%. Residential construction rose 0.7%, and was due mostly to the construction of single-family homes – something that has been declining since the 2008 housing crisis began.