February Construction Inches Further Backwards

The slowing trend in construction outlays continued in February, as total spending shrunk by 0.1% (seasonally adjusted) from $922.2 billion in January to $921.1, according to a report by the Department of Commerce. Economists had expected no change in outlays, despite the fact that January?EUR??,,????'???s revised 0.8% plummet was the largest drop since February of 2003.

Residential building, which comprised more than half of total construction spending, decreased 0.3%. Some economists believe that this is due, at least in part, to the unusually wet weather in the south, where 1.43 more inches of rain than average fell. However, new home spending rose an estimated 5.8% in February, indicating that buyer sentiment still lies with an increasing market. Officials hope that a low 30-year mortgage rate that is a half point above June?EUR??,,????'???s record will inspire another rebound in the buyers?EUR??,,????'??? arena.

All-in-all, private building rose 0.1%, with the largest gains in health care and lodging construction. Public construction dove 1%, with the largest decreases in housing and highway and street outlays.

Type of Construction	Spending in Billions of Dollars (Feb. '04)	% Change From Jan. 2004	% Change From Feb. 2003
Total	921.1	-0.1	+5.1
Private Construction	714.9	+0.1	+7.5
Private Residential	499.2	-0.3	+11.3
Public Construction	206.2	-1.0	-2.5
Education (Public)	55.1	+0.2	-2.3
Education (Private)	13.1	+1.4	+3.7
Lodging (Total)	10.1	+9.1	+0.2
Public Office	10.5	+6.0	+6.3
Public Highway	60.2	-3.4	-0.9
Public Housing	5.3	-6.8	-13.9
Private Health Care	23.1	+2.3	-2.4