Construction Spending Rises in Public Sector

Washington, DC, May 3, 2010--U.S. construction spending rose unexpectedly in March and was the first advance since October, thanks to increased public construction, the Commerce Department said.

The government said construction spending increased 0.2%, the largest gain since October, to an annual rate of $847.3 billion. That followed February's revised 2.1% drop that was previously reported as a 1.3% fall.

Economists had forecast construction spending falling 0.3% in March.

Public construction spending surged 2.3% in March, the biggest rise since February last year. Investment in private construction spending fell 0.9% to $550.81 billion, the lowest level since January 1999. .

The decline in private construction spending in March was led by private home building, which dropped 1.1%. New home construction contracted in the first quarter of 2010 after two straight quarters of gains, subtracting from overall growth during the period, a government report showed on Friday.

Private nonresidential spending fell 0.7% in March, extending the 1.5% decline in February. Investment in structures has dropped for seven straight quarters.

State and local government investment in construction projects rose 2.5% in March after falling 2 percent in February. Federal construction rose 0.3%.