March construction spending posts unexpected 0.2 percent increase as government activity gains

March construction activity posts unexpected gain

WASHINGTON — Construction spending rose in March for the first time in five months, but all the strength came in government activity as private sector building fell to the lowest level in a decade. Weakness in construction remains a major drag on the economic recovery.

The Commerce Department says construction activity increased by 0.2 percent in March, the first advance since last October. The small gain took economists by surprise. They had been forecasting a 0.3 percent drop.

The strength came from a 2.3 percent rise in public building projects, the biggest increase in 13 months. That helped to offset declines in the private sector, where activity fell to the lowest point since January 1999.