PROVIDENCE – United States construction spending is going in different directions depending on whether it’s spearheaded by governments or the private sector, with a surge in public outlays masking a slump in building by businesses.
Overall spending was little changed in April from the prior month at an annual rate of $1.3 trillion, according to a report Monday from the Commerce Department, below analyst forecasts for a 0.4% increase. But the details showed private construction plunged 1.7% from March, the worst drop in six years, while government building jumped 4.8%, with the biggest boost in federal outlays since 2017.
Public spending this year has jumped more than 10% in several infrastructure categories including highways and streets, sewage and waste disposal and water supply. In the private sector, single-family home construction – down 7.1% year-to-date – is a major factor in the slump, while commercial and communication building have also seen notable declines.
While infrastructure investment may be long overdue in parts of the country, the data could add to concerns that the economy is slowing more broadly. Investors have been increasing bets in recent weeks that the Federal Reserve will cut interest rates, as a segment of the Treasury yield curve suggests a recession is coming based on the pattern from prior expansions.
Scott Lanman is a reporter for Bloomberg News.
