WASHINGTON (AP) -- The Commerce Department reports on U.S. construction spending in January. The report will be released at 10 a.m. EST Monday.
BUILDING DIPS: The expectation is that construction spending edged down 0.1 percent in January, according to a survey of economists by FactSet.
CONSTRUCTION SLOWDOWN: For December, construction spending posted a tiny 0.1 percent increase after a 0.8 percent increase in November.
Economists believe that construction, like other parts of the economy, could be in a slowdown caused by unusually severe winter weather.
However, the expectation is that builders will see better gains once spring and warmer weather arrive.
Much of the construction business is being driven by a revival in housing construction, which is expected to show further gains in 2014.
Sales of new homes rebounded in January to the fastest rate in more than five years following a slowdown at the end of last year that was linked to higher mortgage rates and severe winter weather.
Most economists are looking for sales of new and existing homes to show further gains in 2014, bolstered by an improving economy and steady job growth.
Sales of new homes rose 9.6 percent in January to a seasonally adjusted annual rate of 468,000. It was the fastest pace since July 2008. The surge came as a surprise to economists. Most had expected a decline in January, in part because they thought purchases would be held back by winter storms in much of the country. Sales had fallen 3.8 percent in December and 1.8 percent in November, prompting concerns that the housing recovery might be losing momentum.
Housing, while still a long way from the boom of several years ago, has been recovering over the past two years. Residential construction has grown at double-digit rates and contributed about one-third of a percentage point to overall economic growth last year.
Economists think home construction will rise further in 2014 although at a slower pace than in 2013.
Economists are optimistic about further sales gains because they think the overall economy will strengthen this year as more people find jobs and last year's drag from higher federal taxes and government spending cuts eases.
One assumption underlying expectations on housing: Even as the Federal Reserve keeps scaling backs its bond purchases, which were used to keep long-term rates low, mortgage rates will rise only gradually this year.
- Budget, Tax & Economy