Total construction spending decreased by 0.4% in December, yet industry job openings at the end of the month set a new high for December, according to an assessment the Associated General Contractors of America conducted of two new federal data sets. Association officials said the jobs data signals that the slowdown in construction spending may have been more about changes in weather than demand.
“The record number of job openings in construction compared to previous Decembers suggests contractors are bullish about their backlogs despite a dip in spending in December,” said Ken Simonson, the association’s chief economist. “Some of the downturn may be due to unusually bad weather rather than a shrinking market.”
Construction spending, not adjusted for inflation, totaled $1.810 trillion at a seasonally adjusted annual rate in December, 0.4% below the November rate, which was revised up from the initial estimate a month ago. Spending on private residential construction decreased for the seventh consecutive month in December, by 0.3%. Spending on private nonresidential construction fell 0.5% in December, while public construction investment declined 0.4%.
A separate government report showed there were 359,000 job openings in construction at the end of the year, a jump of 58,000 or 19% from a year earlier and the highest December total in the 23-year history of the data. Openings exceeded the 217,000 workers hired during the entire month, which suggests contractors wanted to bring on board more than twice as many employees as they were able to find, Simonson added.
Spending varied among large private nonresidential segments. The biggest component, commercial construction—comprising warehouse, retail, and farm construction—increased 0.4%. Spending on manufacturing plants decreased 2.2%. Private power construction rose 0.5%.
Public categories were also mixed. The largest public segment, highway and street construction, increased 1.1% in December. Spending declined 0.3% for education construction. Investment in transportation facilities rose 0.2%.
Residential spending shrank due to a 2.3% contraction from November in single-family homebuilding. That outweighed increases of 3.2% in multifamily construction and 0.7% in additions and renovations to owner-occupied houses.