US construction spending drops 0.3 percent in January
US construction spending fell 0.3% in January as private projects weakened. Rising mortgage rates and higher costs continue to weigh on residential investment.
Construction spending in the United States saw an unexpected decline in January, primarily due to broad weakness in private sector projects. According to a report from the Commerce Department's Census Bureau, total construction outlays fell 0.3% following an upwardly revised 0.8% jump in December. The performance missed the expectations of economists, who had predicted a slight increase of 0.1% in a poll by Reuters. On a year-over-year basis, spending remained 1.0% higher than in January of the previous year. The Census Bureau is still catching up on data releases following delays caused by last year's government shutdown.
The private sector led the downturn, with spending on private construction projects falling 0.6%. Residential investment dropped 0.8%, a sharp reversal from the 2.5% surge seen in December. Within the residential category, spending on new single-family housing projects decreased by 0.2%, as the market continues to face pressure from elevated mortgage rates. Multi-family housing units also saw a decline of 0.7%.
