Mixed Results for January Construction SpendingMarch 3rd, 2017 by Editor
Construction spending slipped from December to January but increased from a year ago, according to an analysis by the Associated General Contractors of America (AGC).
Construction spending in January totaled $1.18 trillion at a seasonally adjusted annual rate, according to AGC chief economist Ken Simonson. He adds that the January rate was down 1 percent from the month before but up 3.1 percent from January 2016.
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), which gained 1.4 percent for the month and 5.8 percent over 12 months. 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 but gained 34 percent compared with January 2016.
Public construction spending dropped by 5.0 percent from December to January and 9.0 percent from the January 2016 rate. Transportation segments (transit, passenger rail, airports and ports) dipped 8.1 percent for the month and 12 percent relative to January 2016.
“These numbers suggest that demand for residential and private nonresidential structures remain strong but all levels of government are struggling to fund needed projects,” says Simonson. “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.”