Construction spending decreased 0.2 percent from November to December as declines in public and private nonresidential projects outweighed a large rise in single-family homebuilding, according to a new analysis of federal data released today by the Associated General Contractors of America. Association officials noted that its recent survey found widespread optimism about prospects for projects available to bid on in 2020 but they urged officials in Washington to follow through on announced plans for infrastructure spending increases.
“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 many nonresidential categories should match or exceed 2019 levels.”
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 the U.S. Census Bureau released today. Private residential spending increased 1.4 percent for the month, led by a 2.7 percent increase in single-family homebuilding. Private nonresidential spending declined 1.8 percent for the month and 0.1 percent compared to December 2018. Public construction spending slipped 0.4 percent from November but jumped 11.5 percent from a year earlier.
For 2019 as a whole, spending totaled $1.303 trillion, a dip of 0.3 percent from the 2018 total. Private residential spending declined 4.7 percent for the year, private nonresidential spending was flat, and public construction spending increased 7.1 percent.
The new spending data comes as the association’s 2020 Construction Outlook survey found that for each of 13 project types, more contractors expect an increase in 2020 than a decrease in the dollar value of projects they compete for. On balance, the 956 respondents were most optimistic about water and sewer construction, followed by highway and bridge projects, transportation structures (including airports, transit, rail and port facilities), schools, and hospitals.
Association officials said continued growth in highway and other transportation construction depends in part on timely action by Congress and the President to approve new infrastructure spending plans. The officials noted that the current highway and transit funding legislation expires in less than eight months, and they urged policy makers to reach agreement swiftly on how to boost funding for all types of infrastructure.
“Expanding and modernizing the transportation infrastructure is essential for continued economic health,” said Stephen E. Sandherr, the association’s chief executive officer. “That is why Congress and the Trump administration must act quickly to boost investments in all modes of transportation.”
View the 2020 Construction Outlook Survey.
Related Stories
Market Data | Jun 23, 2020
7 must reads for the AEC industry today: June 23, 2020
Gyms are going bacnkrupt and leaving gaps in shopping centers and how hotels are trying to keep guests and employees safe.
Market Data | Jun 22, 2020
New House infrastructure package will provide needed investments in aging infrastructure, support economic recovery, and create jobs
The Moving Forward Act’s proposed $1.5 trillion in new investments will improve range of public infrastructure, creating needed demand for construction while making the economy more efficient.
Market Data | Jun 22, 2020
7 must reads for the AEC industry today: June 22, 2020
Construction employment rises from April to May in 45 states and the first building in the U.S. designed for post COVID-19 environment.
Market Data | Jun 22, 2020
Construction employment rises from April to May in 45 states, slips in 5
Rebound from April job losses reflects one-shot help from paycheck protection program loans and easing of stay-at-home orders, but cancellations and state and local deficits imply further cuts ahead.
Market Data | Jun 19, 2020
7 must reads for the AEC industry today: June 19, 2020
Brown University's first housing building in three decades and demand for family rentals expected to jump.
Market Data | Jun 18, 2020
New data shows construction activity returning to pre-coronavirus levels in many parts of the country
Association survey and data collected by Procore measure impacts of the pandemic, showing signs of a construction recovery, but labor shortages and project cancellations show industry needs federal help.
Market Data | Jun 18, 2020
AIA releases strategies and illustrations for reducing risk of COVID-19 in schools
For the 2020-21 school year, districts are facing the difficult task of determining if K-12 schools will reopen this fall.
Market Data | Jun 18, 2020
6 must reads for the AEC industry today: June 18, 2020
Northbrook's new cannabis dispensary and America's structural steel industry remains a success story.
Market Data | Jun 17, 2020
6 must reads for the AEC industry today: June 17, 2020
Santa Fe becomes the second city in the world to achieve LEED v4.1 and the megacity is dead.
Market Data | Jun 16, 2020
7 must reads for the AEC industry today: June 16, 2020
Tottenham Hotspur Stadium has its own brewery and workers want policy changes before they return to offices.