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Census Bureau: Construction Spending Flat in February

by Peter Thomas Ricci

February was a stable month for construction, according to the latest analysis by the U.S. Census Bureau.

Construction spending in February held steady at a seasonally adjusted annual rate of $945.7 billion, according to the latest numbers from the U.S. Census Bureau. That’s 0.1 percent above January’s numbers, but 8.7 percent above Feb. 2013.

The first two months of this year, construction spending has amounted to $128.0 billion, which is 8.9 percent higher than the $117.5 billion during the same period a year ago.

New Construction – Holding Steady

Some more specific information from the Census Bureau’s report included:

  • Private construction came out to an annual rate of $680.0 billion, a 0.1 percent increase from January; meanwhile, residential construction was down 0.8 percent to a rate of $360.4 billion.
  • According to Bill McBride’s numbers on Calculated Risk, residential construction has now increased 58 percent since bottoming in 2009, though it remains 47 percent below its 2006 peak.
  •  Year-over-year, residential construction increased 14 percent in February, per McBride.
  • Also, a very intriguing stat courtesy of Trulia’s Jed Kolko – in February, 39 percent of residential construction spending was for remodeling; that’s down from 50 percent during the worst period in the downturn, but is still nearly double the rate during the bubble years.

Seasonal Effects?

Considering that the Census Bureau’s numbers were for February, a reasonable question arises: how much did the month’s miserable weather affect those numbers?

According to a new analysis by CoreLogic, the impact may not be as much as one would think. Looking at housing starts data (which is also tracked by the Census Bureau), CoreLogic found that starts fell 55 percent in the Midwest and 11 percent in the South, though they rose 8 percent in the Northeast and 11 percent in the West. Naturally, the horrific winter in the Midwest and surprising snowfall in the South were to blame for their declines, right?

Well…not necessarily. Based on CoreLogic’s models, the winter should have impacted the Midwest’s starts by 6 percent, the South by 2 percent and the Northeast by 6 percent, yet clearly, the resulting data from the Census Bureau was a bit more erratic.

“As CoreLogic put it: “While colder weather is a substantiated factor, clearly, the monthly change in housing starts is not entirely attributable to the colder-than-average temperatures.”

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