MNI DATA IMPACT: US Feb Construction Up 1.0%, Above Exp>

--January Business Inventories +0.8%; +0.8 Excluding Retail Auto Gain

--Private Residential Spending +0.7%; Nonresidential -0.5%

--Public Construction Spending +3.6% To All-time High

By Shikha Dave and Harrison Clarke

     WASHINGTON (MNI) - Construction spending was up 1.0% in February,  

well above the 0.1% gain expected by MNI and the 0.1% decline expected 

by the Bloomberg consensus, as private residential construction rose 

0.7%, data released by the Commerce Department Monday morning showed. 

     Also released Monday morning was January business inventories, 

which rose 0.8%, above the 0.4% gain expected by MNI and the 0.5% gain 

expected by the Bloomberg consensus. 

Here are the key takeaways from the releases:

     -Private residential construction rose by 0.7% in the month, 

following a 1.8% gain in January. Home building ex. new homes, also 

known as remodeling, saw a 3.6% increase, according to an MNI 

calculation. Also based on an MNI calculation, total new homes fell by 

1.0%. Single-family building fell by 1.1%, while multi-family building 

posted a 0.4% decrease. 

     -In contrast to the increase in private residential, private 

nonresidential construction fell by 0.5% in February, partially 

offsetting the increase in total private construction. The main drivers 

of the category were transportation (-7.0%), commercial (-0.8%), and 

educational (-4.4%). 

     -Following an upward January revision to a 5.7% increase from a 

previously reported 4.9% gain, public construction spending rose by 3.6% 

in February to an all time high. The gain in public construction was 

driven by a 9.5% gain in highway and street, slightly offset by health 

care and commercial construction. State and local construction was up 

3.8% in the month, also to an all time high. Federal construction rose 

by 0.9%. 

     -Retail inventories rose 0.8%, while the wholesale inventories 

report showed a 1.2% increase in the month and factory inventories were 

already reported to be up 0.5%. According to an MNI calculation, if a 

1.2% increase in motor vehicle inventories had been excluded, total 

business inventories would have been up 0.8% in January. 

     -After excluding the increase in retail motor vehicle inventories, 

the remaining retail categories were up 0.6%. All of the other retail 

inventory components were generally up in January. At the same time, 

the relatively large unpublished retail category was up 0.3% following 

a 1.4% increase in December, according to an MNI calculation. 

     -January business sales posted a 0.3% increase in the month, with 

retail sales excluding food services rising 0.8%. There was a previously 

announced 0.4% decline for factory shipments, which are equal to sales 

in this report, and wholesale sales posted a 0.5% rise. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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