After declining during an unusually stormy winter, construction spending rose a modest 0.8 percent in March, the government said this week.
The Commerce Department said residential, nonresidential and government spending totaled $495.4 billion, up from $491.7 billion in February.Spending had been down 1 percent in February and 2.3 percent in January after having increased for each of the previous eight months.
The recovery in March was less than most analysts expected and was held down by a drop in government spending, which slipped 2.7 percent to $126.9 billion. Government spending in February declined 0.3 percent.
The severe winter prevented builders from laying foundations and raising roofs in many areas of the country. But analysts say there is still considerable momentum in the construction industry.
Spending on residential construction rose 1.5 percent in March to $234.4 billion, after increasing 0.3 percent in February and 0.4 percent in January. With revised figures for January - which previously had shown this category unchanged - residential con-struc-tion now has risen 11 straight months.
Home buying has been advancing this year despite an increase in mortgage lending rates from the 25-year lows reached last October. Thirty-year, fixed-rate mortgages averaged 8.32 percent last week, according to the Federal Home Loan Mortgage Corp.
Spending on apartment buildings was up 1.8 percent in March, the third straight increase. Multi-family construction generally has lagged in recent years because of vacancies in many areas of the nation.
Nonresidential spending rebounded sharply in March, rising 3.8 percent to $92.7 billion after a 5.1 percent drop in February.
Spending on office buildings helped lead the recovery, increasing 9.1 percent after dropping 5.3 percent in February.