The seasonally adjusted annual rate of construction spending for February was $1,144.0 billion. This is a 0.5% drop from January’s estimate which got a big bump when it was revised up from $1,140.8 billion to $1,150.1 billion. December’s estimate was also revised up from $1,123.5 billion to $1,125.9 billion. Despite the drop in February, construction spending during the first two months of 2016 is up an impressive 11.2% from the same time period last year. Total spending was $157.1 billion for January and February combined. In 2015, it was $141.3 billion. The annual rate of spending is up 10.3% from February 2015.
The seasonally adjusted rate for private construction spending decreased 0.1% from a revised up estimate of $847.2 billion in January to $846.2 billion. This is the first decrease in total private construction spending since June 2015. January’s previous estimate was at $831.4 billion. December was also revised up, going from $827.3 billion to $832.8 billion, and November’s estimate was revised up again from $828.8 billion to $830.2 billion. Private construction spending has increased 9.5% from the January 2015 figure.
Private nonresidential spending was down 1.3% while residential was up 0.9%. The positives for private construction spending were for Office which is up 4.2% from last month and 30.5% from a year ago and Educational which rose 4.0% from January and is up 21.4% for the year.
The rate of public construction spending dropped 1.7% in February to $297.8 billion. January’s estimate was revised down from $309.4 billion to $302.8 billion and December was revised down from $296.2 billion to $293.1 billion. Public construction spending is up 9.2% from February 2015.
On the public side, the biggest increase was in Commercial which was up 2.8% for the month and is up 45.2% over the last year. The biggest drops were for Educational which fell 4.2% and Conservation and Development which dropped 5.0% from January.
The silver lining in February’s disappointing report from the U.S. Census Bureau is that total construction spending for the first two months of 2016 has far outpaced 2015. It’s way too soon to hit the panic button. Last year, the annual rate fell about 6.1% from two consecutive months of drops in October and November and despite that we had the best year for construction spending since 2008. It’s still early in the year and March numbers should be higher since we just saw 37,000 jobs added in construction.