US Residential Construction Spending Rebounds in February

A closer look at the US Census Bureau’s February construction spending report, with analysis by the National Association of Home Builders (NAHB), reveals that private residential construction spending increased 1.3%, rebounding from a 1.2% dip in January. The growth was largely driven by higher spending on single-family construction and residential improvements. Year-over-year, spending expanded 1.6%, a modest growth in private residential construction spending during market uncertainties.

The February increase in total private construction spending was primarily driven by gains in spending on single-family construction and residential improvements. Single-family construction spending was up 1% for the month, continuing to grow after a five-month decline from April to August 2024. This growth is consistent with strong single-family housing starts in February. However, single-family construction spending remained 0.1% lower than a year ago.

Meanwhile, improvement spending rose 2% in February and was 8.9% higher compared to the same period last year.

In contrast, multifamily construction spending stayed flat, extending the downward trend that began in December 2023. Compared to a year ago, multifamily construction spending was down 11.6%.

Spending on private nonresidential construction was up 2.5% over a year ago. The annual private nonresidential spending increase was mainly due to higher spending for the class of manufacturing, up $10.5 billion, followed by the power category, up $6.4 billion.