April 1, 2019 / 2:15 PM / 4 months ago

U.S. construction spending rises to a nine-month high in February

WASHINGTON, (Reuters) - U.S. construction spending increased for a third straight month in February, boosted by gains in both private and public construction projects, offering some good news on the economy following a string of weak reports.

FILE PHOTO - A construction worker carries a wheelbarrow of cement down a street during very hot weather in the Harlem section of Manhattan in New York City, New York, U.S., June 18, 2018. REUTERS/Mike Segar/File Photo

The Commerce Department said on Monday construction spending rose 1.0 percent to a nine-month high after an upwardly revised 2.5 percent surge in January.

Economists polled by Reuters had forecast construction spending falling 0.2 percent in February after a previously reported 1.3 percent jump in January.

Construction spending increased 1.1 percent on a year-on-year basis in February.

In February, spending on private construction projects rose 0.2 percent after vaulting 1.5 percent in January. Investment in private residential projects increased 0.7 percent, rising for a third straight month.

The strong gains are despite a sluggish housing market, which has been held back by higher mortgage rates, expensive building materials as well as land and labor shortages. But there are signs of green shoots emerging in the housing market as mortgage rates have declined from last year’s lofty levels.

Spending on private nonresidential structures, which includes manufacturing and power plants, fell 0.5 percent in February after jumping 1.1 percent in January.

Investment in public construction projects rose 3.6 percent in February after accelerating 5.7 percent in the prior month.

Spending on federal government construction projects rose 0.9 percent to the highest level since October 2017, after soaring 5.7 percent in January.

Investment in state and local government construction projects rose 3.8 percent after surging 5.7 in January.

Reporting By Lucia Mutikani; Editing by Andrea Ricci Lucia.Mutikani@thomsonreuters.com; 1 202 898 8315; Reuters Messaging: lucia.mutikani.thomsonreuters.com@reuters.net

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