News

Construction Spending Diverges In December With Slump In Private Nonresidential Sector, Mixed Public Work, And Boom In Homebuilding

Demand for Nonresidential Construction and Public Works Will Decline Amid Ongoing Pandemic Concerns, Worsening State and Local Budgets as Association Officials Call for New Recovery Measures

Construction spending in December exhibited sharply varied trends, with downturns from a year earlier in every private category, mixed results for public construction, and double-digit increases in residential construction, according to an analysis of new federal construction spending data by the Associated General Contractors of America. Association officials said the new figures demonstrate how the pandemic is boosting demand for new housing while undermining demand for most other types of construction projects.

“Private nonresidential construction has declined for six months in a row, and the slide is accelerating,” said Ken Simonson, the association’s chief economist. “While some categories of public construction have held up so far, state and local budget problems are likely to drive a downturn in public project starts in the next few months.”

Construction spending in December totaled $1.49 trillion at a seasonally adjusted annual rate, an increase of 1.0 percent from the pace in November and 5.7 percent higher than in December 2019. But the gains were limited to residential construction, which soared 3.1 percent for the month and 20.7 percent year-over-year. Meanwhile, private and public nonresidential spending fell 0.8 percent from November and 4.8 percent from a year earlier­.

Private nonresidential construction spending slumped 1.7 percent from November to December and 9.8 percent from December 2019. All 11 private nonresidential categories in the government report declined from a year earlier.

Read more.

Industry Priorities