Construction spending was virtually unchanged in February as an increase in work on government projects was offset by a decline in building activity on homes and non-residential facilities such as factories, the government said.

Construction spending took place at a seasonally adjusted annual rate of $423 billion in February, a slight increase from the pace of $422.8 billion during the previous month, the Commerce Department reported.It was the weakest performance since construction spending declined 0.2 percent last August. Rising interest rates have dampened building activity in most sectors, with fixed-rate mortgages averaging 11.19 percent last week, compared with 9.87 percent a year earlier.

In February, spending on residential construction declined 0.2 percent to a seasonally adjusted annual rate of $203.4 billion. The pace of building activity on single-family homes was unchanged, while spending on apartment construction rose 5.8 percent and home improvements decreased.

Non-residential construction, meanwhile, declined 0.3 percent to a seasonally adjusted annual rate of $97.8 billion. Spending on industrial projects such as factories was down 1.9 percent, hotel and motel spending was down 4.2 percent, and work on offices rose 1.8 percent.

Spending on government construction, meanwhile, rose 0.7 percent to a seasonally adjusted annual rate of $82.7 billion. The largest category of government construction, highways and streets, was down 3.3 percent.

Most other government categories posted gains or were unchanged, with spending on construction of educational facilities rising 4.8 percent.