Overall Construction Spending Slips in January While Private Construction Demand Grows
Construction spending slipped from December to January but increased modestly from a year ago as private construction grew solidly but public infrastructure outlays tumbled, according to an analysis by the Associated General Contractors of America.
“These numbers suggest that demand for residential and private nonresidential structures remain strong but all levels of government are struggling to fund needed projects,” said Ken Simonson, AGC’s chief economist. “It appears that homebuilding, office and power construction will continue to grow through 2017, while manufacturing, highway and other transportation construction are likely to hold down overall growth.”
Construction spending in January totaled $1.180 trillion at a seasonally adjusted annual rate, Simonson said. He added that the January rate was down 1.0 percent from the month before but up 3.1 percent from the January 2016 level.
Private residential construction spending increased by 0.5 percent between December and January and rose 5.9 percent over the past 12 months. Spending on multifamily residential construction jumped 2.2 percent for the month and 9.0 percent year-over-year, while single-family spending climbed 1.1 percent for the month and 2.3 percent from a year earlier.
Private nonresidential construction spending was flat for the month and increased 8.9 percent year-over-year. The largest private nonresidential segment in January was power construction (including oil and gas pipelines), while the next-largest segment, commercial (retail, warehouse and farm) construction, declined 0.5 percent in January but rose 12 percent year-over-year. Manufacturing construction rose 0.6 percent for the month but fell 6.8 percent from a year before. Private office construction spending dipped 0.5 percent for the month and but gained 34 percent compared with January 2016.