Homebuilding Strengthens but Infrastructure and Other Nonresidential Spending Fades in Recent Months, Reversing Pattern in Early 2019; Industry Survey Shows Strong 2020 Demand for Projects and Workers
Construction spending decreased 0.2 percent from November to December as declines in public and private nonresidential projects outweighed a large rise in single-family homebuilding, according to a new analysis of federal data released today by the Associated General Contractors of America. Association officials noted that its recent survey found widespread optimism about prospects for projects available to bid on in 2020 but they urged officials in Washington to follow through on announced plans for infrastructure spending increases.
“Both the actual spending totals for December and our members’ expectations for 2020 point to a positive year for all major categories of construction,” said Ken Simonson, the association’s chief economist. “Continuing job gains throughout the nation, along with low interest rates, make a good year for residential construction especially likely, while spending many nonresidential categories should match or exceed 2019 levels.”
Construction spending totaled $1.328 trillion at a seasonally adjusted annual rate in December, a decrease of 0.2 percent from November but a gain of 5.0 percent from December 2018, according to estimates the U.S. Census Bureau released today. Private residential spending increased 1.4 percent for the month, led by a 2.7 percent increase in single-family homebuilding. Private nonresidential spending declined 1.8 percent for the month and 0.1 percent compared to December 2018. Public construction spending slipped 0.4 percent from November but jumped 11.5 percent from a year earlier.