Broad-Based Weakness Reflects Mounting Macroeconomic Headwinds
Source: Economics Group of Wells Fargo Bank, N.A.
Summary
Residential and Nonresidential Construction Edge Lower
Overall construction spending dipped 0.5% in March, a weaker-than-expected outturn propelled by declines in both residential and nonresidential spending. Residential construction spending registered its first slip in six months, largely driven by a drop in home improvement outlays. Single-family outlays also showed signs of waning momentum, posting a modest 0.1% upturn. Meanwhile, nonresidential construction spending worsened across both public and private projects as high interest rates and heightened economic uncertainty suppressed new building. If a silver lining can be gleaned, it is that multifamily construction appears to be stabilizing following a year-long downdraft, reflecting persistent affordability challenges facing single-family homebuyers.