U.S. Construction Spending Rises for the 12th Straight Month in December
Summary
- Construction spending +0.9% m/m in Dec., higher than expected; +13.9% y/y, highest since June ’22.
- Residential private construction gains 1.4% m/m, led by a 1.7% rebound in home improvement.
- Nonresidential private construction eases 0.2% m/m, the first monthly decline since June ’23.
- Public sector construction rises 1.3% m/m, led by a 1.4% increase in nonresidential public construction.
The value of construction put in place rose 0.9% m/m in December after upwardly revised rises of 0.9% in November (+0.4% initially) and 2.1% in October (+1.2% previously), according to the U.S. Census Bureau. The December reading registered the 12th consecutive monthly gain. A 0.5% m/m increase had been expected in the Action Economics Forecast Survey. The year-on-year rate accelerated to 13.9% in December, the highest since June 2022, from 12.8% in November. The December y/y reading was higher than a low of 1.3% in April 2023 and 4.9% in December 2022 but still below a peak of 16.5% in April 2022. The value of construction was $1,978.7 billion in 2023, 7.0% above the $1,848.7 billion in 2022.
Private construction increased 0.7% (11.8% y/y) in December after upwardly revised gains of 1.1% in November (+0.7% initially) and 1.6% in October (+1.2% previously). The December reading was the seventh m/m increase in eight months. Residential private construction rose 1.4% (6.8% y/y) in December, the fourth m/m rise in five months, after a 1.0% increase in November. Home improvement building recovered 1.7% (1.4% y/y), the second m/m gain in three months, following a 0.5% November decline; it was 38.2% of the residential private construction. Single-family building rose 1.6% (9.9% y/y), the eighth straight m/m rise, after a 2.5% November gain; it was 46.9% of the residential private construction. Multi-family building increased 0.3% (11.9% y/y) following a 0.4% November rise and two successive m/m drops; it was 14.9% of the residential private construction.
Nonresidential private construction fell 0.2% (+19.1% y/y) in December, the first m/m fall since June, after a 1.1% increase in November. The December fall reflected m/m declines of these nonresidential private constructions: health care (-0.8%; +13.6% y/y), commercial (-0.5%; +1.3% y/y), office (-0.2%; +3.1% y/y), educational (-0.2%; +18.5% y/y), religious (-0.2%; +31.3% y/y), communication (-0.1%; +1.4% y/y), and manufacturing (-0.1%; +60.8% y/y). In contrast, the following nonresidential private constructions rose m/m in December: amusement & recreation (0.9%, the ninth m/m gain in 10 months; 1.9% y/y) and utilities (0.3%, the sixth consecutive m/m rise; 13.4% y/y). Meanwhile, lodging private construction (-0.04%; +4.7% y/y) and transportation private construction (+0.02%; 4.1% y/y) were virtually unchanged m/m in December.
The value of public construction grew 1.3% (21.3% y/y) in December, the 16th straight m/m advance, after an upwardly revised 0.5% increase in November (-0.7% initially), reflecting a 2.5% decline (+11.3% y/y) in residential public construction and a 1.4% gain (21.6% y/y) in nonresidential public construction. The following nonresidential public constructions rose m/m in December: health care (2.7%; 15.2% y/y), public safety (2.1%; 34.9% y/y), conservation & development (1.4%; 22.1% y/y), transportation (1.1%; 9.3% y/y), office (0.7%; 18.8% y/y), amusement & recreation (0.6%; 20.6% y/y), and commercial (0.6%; 5.7% y/y). Notably, spending on highways & streets, which made up 31.7% of public construction spending, rose 4.1% (25.9% y/y) in December, the ninth consecutive m/m rise, on top of a 3.0% November increase. To the downside, the following nonresidential public constructions fell m/m in December: water supply (-2.5%; +19.8% y/y), sewage & waste disposal (-0.8%; +23.0% y/y), utilities (-0.3%; +64.8% y/y), and educational (-0.1%; +16.1% y/y); they all posted the second successive m/m decline.
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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