US Construction Spending Surges in January on Homebuilding

By Reuters
Reuters
Reuters
March 2, 2022 Updated: March 2, 2022

WASHINGTON—U.S. construction spending surged in January, boosted by strong outlays on single-family homebuilding and private nonresidential structures.

The Commerce Department said on Tuesday that construction spending increased 1.3 percent. Data for December was revised higher to show construction outlays rising 0.8 percent instead of 0.2 percent as previously reported.

Economists polled by Reuters had forecast construction spending gaining 0.2 percent. Construction spending increased 8.2 percent on a year-on-year basis in January.

Spending on private construction projects shot up 1.5 percent in January. Outlays on residential construction increased 1.3 percent.

Single-family homebuilding spending advanced 1.2 percent, while outlays on multi-family housing projects dipped 0.1 percent.

Despite January’s jump, homebuilding remains constrained by higher prices for building materials, especially framing lumber. The United States last November nearly doubled the duties on imported Canadian softwood lumber after a review of its anti-dumping and countervailing duty orders.

The National Association of Homebuilders said last month that building material production bottlenecks were raising construction costs and delaying projects.

Residential investment rebounded moderately in the fourth quarter after two straight quarterly declines.

Investment in private non-residential structures like gas and oil well drilling accelerated 1.8 percent in January, suggesting a rebound in spending early in the first quarter. Spending on structures fell for a third straight quarter in the October-December period.

Spending on public construction projects gained 0.6 percent in January. Outlays on state and local government construction projects fell 0.5 percent, while federal government spending soared 13.8 percent.

Reuters