Construction spending rebounds slightly in March (by Greg Robb)

WASHINGTON (MarketWatch) - Outlays for U.S. construction projects rose a slight 0.1% in March, the Commerce Department reported Tuesday. While it was the first increase in construction spending in three months, the gain was well below analysts' expectations of a 0.5% rise. Another sign of weakness was that February construction spending was revised down to show a 1.4% decline from the previous estimate of a 1.1% drop. In March, spending on private construction rose 0.7% and residential construction rose 0.7%. Private non-residential construction rose 0.7% in March after two straight declines. However, the strength in private construction was partially offset by weakness in the government sector. Spending on public projects fell 1.1% in March to its lowest level since February 2007. State and local construction fell 1.6% in March to hit its lowest level since November 2006. Weak investment in structures was one of the reasons that first quarter economic growth was so disappointing. First quarter GDP rose at a 2.2% annual rate, well below economists' expectation of a 2.7% gain. The March construction spending data imply a downward revision as the government had assumed a larger increase in the month, economists said.