Construction spending rose 0.9% during March, surprising economists since that was the first month that the effects of COVID-19 shutdowns were expected to show up.

 
According to the Wells Fargo Economics Group, this can be explained by several factors, mostly that many residential, infrastructure and healthcare projects had been deemed "essential," and work is continuing. Of course construction data are always highly volatile and subject to substantial revisions, which may ultimately show a decline.

A 1.6% gain in public outlays backstopped the small growth in March, led by highway & street projects, which registered a 4.5% increase.

The statement from the economics group said, "Not only have many infrastructure projects been allowed to continue, some have even been expedited on the basis of lower traffic volumes and mild weather. Looking ahead, the coronavirus crisis is putting massive strains on state and local governments, which has already prompted the suspension of many impending projects."

Private nonresidential spending fell 1.3%, as every major subcategory, except for communication, declined.

But total residential spending expanded 2.3%, mostly due to a 10.2% increase in home improvement spending as it seems that homeowners are using this time to update, revitalize or make major improvements to their residence. Overall multifamily spending gained 2.0%, but outlays for single-family homes, which were showing strength before the coronavirus crisis, fell 2.0%.