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March 1, 2017 10:10 AM, EST

Under Hood of US Construction Spending Is Government Pullback

Luke Sharrett/Bloomberg News

Here’s one key takeaway from the Commerce Department’s report March 1 on U.S. construction spending in January. Outlays dropped 1% from the previous month (forecast was for 0.6% rise), the biggest drop since April, which will drag on first-quarter gross domestic product.

• Public construction spending fell 5%, the biggest decrease since March 2002, to the lowest level since March 2014.

• Spending declined in the two largest public categories, highways and education, as well as in transportation, sewage, public safety and health care.

• State and local agencies spent 4.8% less in January, while the federal government’s outlays dropped 7.4%.

• Private construction rose 0.2% to the highest level since 2006; private residential construction was up 0.5%.