Private nonresidential construction spending unexpectedly increased 2.7 percent in March, according to the May 4 report by the U.S. Census Bureau. On a year-over-year basis, private nonresidential construction spending is up 1.2 percent. Overall, total nonresidential construction spending increased 2.0 percent on the month to $703.8 billion, up 1.7 percent from March 2008 (see graph below).

Construction subsectors posting the largest gains include power plants, up 8.9 percent, and lodging, up 5.2 percent. Meanwhile, manufacturing construction saw the largest increase in a year-over-year basis and is up 63.9 percent followed by power construction, up 15.2 percent.

In contrast, among the four subsectors posting decreases in spending is religious construction, down 9.0 percent. Those construction subsectors with the largest losses from a year ago include communication, down 33.5 percent, commercial, down 20.5 percent and religious construction spending down 11.1 percent.

Public nonresidential construction spending increased 1.2 percent for the month and is up 2.5 percent from the same time last year. However, residential construction spending dropped 4.1 percent from February and is down 33.3 percent on a year-over-year basis. Overall, total construction spending was up 0.3 percent from February and is down 11.1 percent from March 2008.