Construction Spending Rose in February

April 1, 2002

WASHINGTON (Reuters) - Construction spending jumped 1.1 percent in February on a rise in private residential building, the government said on Monday in a report that beat expectations and showed the building and housing sectors have not flagged from their strong pace of last year.

The value of new construction in the United States rose to $879.4 billion in February from a downwardly revised $869.7 billion in January, the Commerce Department said. Construction spending climbed 1.2 percent over February 2001.

The rate of increase was the highest since a matching pace in February 2001, and was ahead of the forecasts of analysts polled by Reuters, who were expecting a 0.7 percent increase.

Private residential building climbed 3.5 percent in February, the largest acceleration in activity since April 1996.

Housing and building have continued at strong levels despite the U.S. economic recession that began in March of last year, as lower interest rates lured buyers and inventories of new homes remained lean.

Many observers attribute the continued strong performance of housing and building in recent months to an unusually mild and dry winter, which has allowed construction projects to continue and made it easier for home buyers to continue shopping.

All private construction rose by 1.7 percent in February, while public construction fell 0.5 percent.

Nonresidential construction -- buildings such as factories, offices, and hotels and motels -- fell by 3.0 percent in the month before last, and was down 17.4 percent over the same month a year ago, an indication of how much harder the recession hit businesses than consumers.

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