U.S. Construction Spending Drops in January Following Three Straight M/M Rises
Summary
- January construction spending -0.2% m/m; +3.3% y/y, the lowest y/y rate since June ’19.
- Residential private construction -0.4% m/m, led by a 1.5% drop in home improvement building.
- Nonresidential private construction unchanged after two successive m/m rises.
- Public sector construction +0.1% m/m, led by a 0.2% rebound in nonresidential public building.
The value of construction put in place fell a slightly more-than-expected 0.2% m/m in January after rises of 0.5% in December (unrevised) and 0.4% in November (+0.2% previously), data from the U.S. Census Bureau showed. The January reading was the first m/m fall since September. A 0.1% m/m January easing had been expected in the Action Economics Forecast Survey. The year-on-year rate of increase decelerated to 3.3% in January, the lowest since June 2019, from 4.5% in December; thus, having remained below its recent high of 9.8% in January 2024 and a peak of 18.6% in April 2022.
Private construction fell 0.2% (+2.6% y/y) in January, down for the first month in four, following gains of 0.7% in December (+0.9% initially) and 0.5% in November (+0.3% previously). Residential private construction was down 0.4% (+3.1% y/y) in January, the first m/m decline since September, after a 1.3% increase in December (+1.5% initially). Home improvement building dropped 1.5% (+14.3% y/y), the fist m/m decrease in four months, after a 2.1% December gain; it was 41.2% of the residential private construction. Multi-family building slid 0.7% (-12.0% y/y), the 14th straight m/m slide, on top of a 0.6% December decline; it was 12.5% of the residential private construction. In contrast, single-family building rose 0.6% (-0.9% y/y) in January, the fifth consecutive m/m rise, after a 1.1% increase in December; it was 46.2% of the residential private construction.
Nonresidential private construction was virtually unchanged m/m (1.8% y/y) in January after increases of 0.1% in December (unrevised) and 0.7% in November (+0.1% previously). The January m/m reading reflected m/m rises in the following nonresidential private constructions. These included religious (1.6%; 6.0% y/y), health care (0.7%; -3.5% y/y), lodging (0.6%; -0.4% y/y), utilities (0.6%; 4.4% y/y), communication (0.5%; 1.2% y/y), and office (0.4%; 3.5% y/y). Meanwhile, the following private constructions fell m/m in January: educational (-1.6%; +0.9% y/y), transportation (-1.0%; +10.3% y/y), commercial (-0.4%; -6.4% y/y), manufacturing (-0.3%; +5.6% y/y), and amusement & recreation (-0.1%; +4.4% y/y).
The value of public construction edged up 0.1% (5.9% y/y) in January following a 0.3% decline in December (-0.5% initially) and a 0.1% uptick in November (-0.1% previously), reflecting a 1.1% decrease (+5.4% y/y) in residential public construction and a 0.2% rebound (5.9% y/y) in nonresidential public construction. The January increase reflected m/m rises in the following nonresidential public constructions. These included conservation & development (0.6%; -1.2% y/y), office (0.6%; 5.7% y/y), transportation (0.6%; 5.7% y/y), sewage & waste disposal (0.4%; 12.3% y/y), amusement & recreation (0.3%; 22.1% y/y), health care (0.2%; 10.6% y/y), and water supply (0.2%; 15.8% y/y). Notably, spending on highways & streets, which made up 28.6% of public construction spending, rose 0.6% (-2.1% y/y) in January on top of a 1.1% gain in December, registering the third straight m/m rise and the fifth in six months. To the downside, the following public constructions fell m/m in January: utilities (-1.1%; -2.5% y/y), educational (-0.4%; +8.3% y/y), commercial (-0.3%; +53.4% y/y), and public safety (-0.2%; +9.8% y/y).
The construction figures can be found in Haver's USECON database. The expectations figure is from the Action Economics Forecast Survey in AS1REPNA.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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