The U.S. Department of Commerce's Census Bureau reported yesterday that construction spending for February increased 0.1% to $945.7 billion above January's revised value of $944.6 billion. Increases were seen in private construction ($680 billion in February, up from $679.1 billion in January) and public construction ($265.7 billion in February, up from $265.5 billion in January). Those gains might seem small, but they're month-to-month increases. The real story is in year-to-year growth. On that basis, private residential construction is up 14% and non-residential is up 12%. Public construction is still weak and down about 2% year-over-year. The figures below from Bill McBride at the Calculated Risk blog do a great job of showing how we're still way off from the bubbly highs of the mid 2000s but up strongly from the bottoms at the beginning of the 2010s.
I agree with Bill in that these gains in construction, along with the increases in the AIA's Architectural Billing Index, shows that the construction industry is getting stronger. The ABI is increasing for commercial construction (read about it here) and will continue to improve as more people find employment and spend money. Private residential tends to lead the economy, so strength in that segment is good news.
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