US construction spending falls 1.1 percent in January with weakness in government projects

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In this Wednesday, Feb. 18, 2015 photo, carpenter Joe Tominc cuts wood for a post on a home under construction in Pepper Pike, Ohio. The Commerce Department reports on U.S. construction spending in January on Monday, March 2, 2015. (AP Photo/Tony Dejak)


WASHINGTON — U.S. construction spending fell in January, reflecting weakness in spending on office buildings and other nonresidential projects and in government activity.

Construction spending fell 1.1 percent in January following a revised 0.8 percent increase in December, the Commerce Department reported Monday.

Spending on home construction rose 0.6 percent but spending on nonresidential projects dropped 1.6 percent, reflecting declines in hotels, office buildings and the category that covers shopping centers. Spending on government projects also declined in January, falling 2.8 percent.

Private economists had predicted a small overall gain in January.

The unusually severe weather in many parts of the country in January could have had an impact activity. Economists expect the weakness will be temporary and are forecasting a rebound in activity once winter storms stop disrupting plans.

In January, spending on single-family homes rose 0.6 percent and spending on apartment buildings rose an even stronger 1.9 percent.

The weakness in nonresidential projects was led by a 5.7 percent drop in the category that covers shopping centers.

The 2.8 percent drop in spending on government projects followed a 1.7 percent rise in December.

Over the course of 2014, spending on offices, power plants, factories and hotels and motels climbed significantly, a potential sign of broader economic growth in 2015.

The solid gains helped boost job growth in the construction industry, which added nearly 3 million jobs in 2014, the most since 1999.

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