Construction Spending Up 7.7% in February

According to the Census Bureau, the value of construction put in place in February 2014 was $63,368 (millions of real dollars). Compared to one year ago, spending in February was up 7.7%. This is the second month in a row that construction spending has increased more than 7.5% compared to one year ago. The annual rate of growth has accelerated each of the last two months. So, while the residential housing market continues to slow, total construction is starting to pick up.

Real construction spending is linked closely to real consumer spending. Real consumer spending has been growing at a fairly constant rate since May 2013. Although, the annual rate of change is ticking up ever so slightly. This could be an indication that real construction spending may continue to grow at a faster rate. However, if consumer spending growth stays flat or slowly decelerates, then it is likely that real construction spending will start growing at a slower rate again.

Real construction spending is a good leading indicator for construction materials, hardware, and HVAC industrial production.