According to a report from the Associated General Contractors of America (AGC), construction spending in December exhibited sharply varied trends, with downturns from one year earlier in every private category, mixed results for the public construction category and double-digit increases in residential construction.
Overall, construction spending totaled $1.49 trillion in December at a seasonally adjusted annual rate, an increase of 1% from the pace in November, and 5.7% higher than in December 2019. However, according to the AGC report, these gains were limited to residential construction, which increased 3.1% for the month and 20.7% year-over-year. At the same time, private and public nonresidential spending fell 0.8% from November and 4.8% from a year earlier.
AGC officials said that the new figures demonstrate how the pandemic is boosting demand for new housing, while undermining demand for most other types of projects.
“Private nonresidential construction has declined for six months in a row, and the slide is accelerating,” said Ken Simonson, AGC’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 new few months.”
- Private nonresidential construction spending fell 1.7% from November to December and 9.8% from December 2019. All 11 private nonresidential categories declined from a year earlier, with the largest category (power construction) falling 10.8%.
- Public construction spending increased 3% year-over-year and 0.5% for the month. There were increases in highway and street construction, as well as educational construction. However, transportation facilities construction declined 1% for the year, despite a 0.9% gain in December.
- Private residential construction increased for the seventh straight month. Single-family homebuilding increased 23.8% over December 2019, and 5.8% for the month. Multifamily construction spending increased 17.8% for the year, and 0.1% for the month.