Steel Markets

Construction Spending Declines in December

February 4, 2020

Construction spending slowed in December, but contractors remain optimistic about new projects for 2020.

Construction spending dipped 0.2 percent from November to December due to a decline in nonresidential project spending. A 1.4 percent jump in private residential spending, supported by a 2.7 percent increase in single-family home construction, failed to offset a decline in nonresidential spending in December, said the Associated General Contractors of America in an analysis of newly released data.

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 by the U.S. Census Bureau. Nonresidential construction spending slipped 1.8 percent in the private sector and 0.4 percent in public construction.

Spending in 2019 totaled $1.303 trillion, down 0.3 percent from 2018. Private nonresidential spending declined 4.7 percent, private nonresidential spending was flat, and public construction spending increased 7.1 percent.

“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 in many nonresidential categories should match or exceed 2019 levels.”

AGC continues to urge Congress and the Trump administration to approve new infrastructure spending plans.