The U.S. construction sector found momentum as the first quarter ended, with spending on projects posting the largest gain in 11 months, a government report showed on Monday.
The Commerce Department said construction spending increased 1.4 percent to an annual rate of $768.9 billion, reflecting strong gains in private residential and nonresidential outlays. February's construction, however, spending was revised to show a bigger 2.4 percent drop than the previously reported 1.4 percent decline.
Economists polled by Reuters had forecast construction spending rising 0.4 percent in March.
Private construction spending in March rose 2.2 percent as investment in residential projects advanced 2.6 percent to $229.1 billion.
Private nonresidential outlays increased 1.8 percent. Spending on public construction edged up 0.1 percent in March, with outlays on federal projects falling 0.3 percent. Construction spending by state and local governments rose 0.3 percent.
However, overall construction spending is still weak, declining 7.8 percent in the first quarter from a year earlier.
Spending on commercial structures dropped at an annual rate of 21.7 percent in the first quarter, the largest fall since the fourth quarter of 2009, a government report showed last week. That contributed to slowing economic growth during the quarter to a 1.8 percent rate from 3.1 percent in the fourth quarter.
(Reporting by Lucia Mutikani; Editing by Neil Stempleman)