The U.S. Census Bureau reported yesterday that construction spending during March was a seasonally-adjusted $942.5 billion, or 0.2% above February's revised estimate of $940.8 billion. This March 2014 figure is 8.4% above March 2013's number. What's astonishing is that the gains are primarily from private construction projects. It's typically for public-sector construction spending to increase as a means for leading the economy out of a recession. Governments spend on infrastructure, etc. to create jobs (remember the discussions of "shovel-ready" projects that would get funded by federal TIGER grants?) and there was a peak in public-sector spending in early the first half of 2009. But since then, as the economy continues to improve (today's jobs number, an increase of 288k jobs and unemployment down to 6.3% shows an improving economy), it's been the private sector, as far as construction's concerned, that's leading the charge.
Private construction's seasonally adjusted rate in March was $679.6 billion, an 0.5% increase from February. Public construction's was $262.9 billion, a 0.6% haircut from February's $264.5 billion number. Everything is off their peaks of past, but we're seeing some nice gains from residential and non-residential construction. Any improvements in public-sector construction, which given that our national infrastructure is in shabby shape and infrastructure will be necessary to support continued housing and commercial construction, will bolster the improving economy.
For more information, be sure to check out this post by Bill McBride.