According to the US Commerce Department, construction spending in the country fell 0.1% in January on a monthly basis, defying the expectations of analysts who had anticipated a 0.2% rise after a 0.7% decline in December.
Despite this, year-on-year construction spending surged 5.7% in January. Private construction spending remained flat in the same period, with private housing spending dropping 0.6% and non-residential spending increasing by 0.9%.
On the other hand, spending on public projects declined by 0.6%, while spending on federal programs witnessed an 8.6% increase. At the same time, spending on state and local government programs fell 1.4%.
The decrease in construction spending comes at a time when the US economy is grappling with the ongoing pandemic and a shortage of materials that has led to an increase in prices. Despite the dip in construction spending, the sector has been resilient throughout the pandemic, and its growth is likely to continue to be a crucial driver of the country’s economic recovery.
The construction industry is a major contributor to the US economy, accounting for approximately 4% of the nation’s GDP, according to the National Association of Home Builders. The industry employs more than 7 million people, making it one of the largest employers in the country.