WASHINGTON, March 1 (Reuters) – U.S. construction spending unexpectedly fell in January, as weak spending on public projects more than offset a moderate increase in private homebuilding.
The Commerce Department said Friday that construction spending fell 0.2%. Data for December was revised upward to show an increase of 1.1%, instead of the 0.9% previously announced.
Economists polled by Reuters had expected construction spending to rise 0.2%, after rising 11.7% year-on-year in January.
Spending on private construction projects rose 0.1% in January, after growing 0.8% in December. Investment in residential construction rose 0.2%, after improving 1.4% the previous month.
Disbursements on new single-family home construction projects increased by 0.6%. Although demand for new construction continues to be supported by tight housing supply, rising mortgage rates are keeping many first-time buyers out of the market.
The average rate on the popular 30-year fixed-rate mortgage is just below 7%, down from 6.62% at the beginning of the year, according to data from mortgage finance agency Freddie Mac. However, it has fallen since 7.79% at the end of October, which was the highest level since 2000.
According to recent government data, in the fourth quarter there were 757,000 homes for sale, well below the 1.145 million units that existed before the COVID-19 pandemic.
Disbursements on multifamily housing projects fell 0.4% in January. There is a large stock of multifamily housing in the pipeline, which could limit any rebound.
Spending on non-residential private structures, such as factories, fell 0.1%. Spending on construction projects in the manufacturing sector advanced 2%, still benefiting from President Joe Biden’s administration’s policy of returning semiconductor manufacturing to the United States.
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Spending on public construction projects fell 0.9%, after advancing 2% in December.
State and local government spending fell 1% and disbursements on federal government projects fell 0.2%.
(Reporting by Lucia Mutikani; edited in Spanish by Carlos Serrano)
2024-03-01 16:29:10
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