Construction spending up slightly in January

WASHINGTON U.S. construction spending showed a tiny increase in January as strength in housing helped to offset declines in nonresidential building and government projects.

Construction spending edged up 0.1 percent in January, significantly slower than an upwardly revised 1.5 percent gain in December, the Commerce Department reported Monday.

Home building was up 1.1 percent in January with single-family construction rising 2.3 percent and apartment building up 1 percent.

However, there was widespread weakness outside of housing. Non-residential construction fell 0.2 percent and office building was flat, with bad weather likely a factor in the weakness.

Total government construction was down 0.8 percent in January compared with December.

Construction spending totaled $943.1 billion in January at a seasonally adjusted annual rate.

The 1.1 percent rise in housing construction was just half of the 2.5 percent gain in December.

Economists had expected the January weakness, believing that construction, like other parts of the economy, would be slowed by the unusually cold weather. However, the expectation is that builders will see better gains once spring and warmer weather arrive.

Most economists are looking for sales of new and existing homes to show further gains in 2014, bolstered by an improving economy and steady job growth.

Sales of new homes rose 9.6 percent in January to a seasonally adjusted annual rate of 468,000. It was the fastest pace since July 2008. The surge came as a surprise to economists.

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Construction spending up slightly in January