Construction spending rose in February for the fourth month in a row as lower interest rates helped to keep demand stable even as the overall economy slowed.
The Commerce Department reported Monday that the value of construction projects nationwide ticked up by 0.6 percent to a seasonally adjusted annual rate of $834.2 billion, an all-time high level.
Most of the strength came from residential projects, where spending rose a solid 2.4 percent. Spending on single-family homes went up by 2.2 percent in February and spending on condos, apartments and other multifamily housing rose by 3 percent.
The Federal Reserve slashed interest rates three times this year, totaling 1.5 percentage points. The rate reductions are designed to lower borrowing costs, thus encouraging consumer and business spending, which eventually should boost economic growth.
While other parts of the economy, especially manufacturing, have been hurt by the economic slowdown, construction and housing activity have held up fairly well. Low mortgage rates have helped keep the market stable.
The average rate on a 30-year fixed-rate mortgage in February was 7.05 percent, nearly unchanged from 7.03 percent in January, but well below the 8.33 percent rate in February of last year.
Reports released last week showed that sales of new and existing homes dipped slightly in February, but demand remained strong as housing continued to demonstrate few adverse effects from the slowdown in the overall economy.
Monday's construction report also showed that spending on commercial projects by private companies edged up 0.1 percent in February. Spending on office buildings rose while spending on hotels and motels fell.
Spending on big government projects, meanwhile, fell by 1.6 percent. Highway, street and conservation projects showed gains, while spending on schools and public housing posted losses.
Overall, construction spending grew by 2.2 percent in January, according to revised figures. That was stronger than the government previously thought. In December spending increased by 0.3 percent and in November by 0.6 percent.
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