U.S. Construction Spending Falls 0.6% in January

U.S. construction spending fell 0.6% in January, the U.S. Commerce Department announced Monday, as an uptick in private residential construction could not offset a decline in private commercial construction.

In the past 12 months, construction spending has decreased 9.3% to $884.1 billion. That's an uncomfortably large decline, but it's still better than the record 12.4% year-over-year decline registered in December.

Economists surveyed by Bloomberg News had expected January construction spending to decline 0.8%, following 1.2% declines in both December and November.

In January, spending for private construction fell 0.6% to $577.3 billion. Private residential construction (which includes housing) rose 1.3% to $260.8 billion, but private non-residential construction (which includes commercial buildings like malls and offices) fell 2.1% to $316.4 billion.

Meanwhile, public construction fell 0.7% in January to $306.9 billion; education construction was flat at $80.3 billion, and highway construction rose 1.2% to $83.5 billion.

Although private residential construction did rise slightly in January, investors should not read too much into it; it's only one month's data, and the housing market is still characterized by a glut of unsold homes. Hence, it would not be surprising to see private residential construction retrench in the months ahead. The January data shows an overall U.S. construction sector that's still looking for a bottom.