U.S. Construction Spending Unexpectedly Eases in January
Summary
- Construction spending down 0.2% m/m in Jan., the first fall since Dec. ’22; +11.7% y/y, the lowest since Sept. ’23.
- Residential private construction up 0.2% m/m, led by a 0.6% rise in single-family building.
- Nonresidential private construction dips 0.1% m/m following six straight monthly rises.
- Public sector construction down 0.9% m/m, the first drop since Aug. ’22, led by a 1.0% fall in nonresidential public construction.
The value of construction put in place fell 0.2% m/m in January after upwardly revised rises of 1.1% in December (+0.9% initially) and 1.2% in November (+0.9% previously), according to the U.S. Census Bureau. The January reading was the first m/m fall since December 2022. A 0.2% m/m January increase had been expected in the Action Economics Forecast Survey. The year-on-year rate decelerated to 11.7% in January, the lowest since September 2023, from 14.4% in December. The January y/y figure was higher than a low of 1.3% in April 2023 and 4.8% in January 2023; nevertheless, having remained below a peak of 16.5% in April 2022.
Private construction edged up 0.1% (9.5% y/y) in January after gains of 0.8% in December (+0.7% initially) and 1.1% in November (unrevised). The January reading was the eighth m/m increase in nine months. Residential private construction grew 0.2% (5.2% y/y) in January, the third m/m gain in four months, after a 1.4% rise in December. Single-family building rose 0.6% (12.5% y/y), the ninth consecutive m/m rise, on top of a 1.8% December increase; it was 47.7% of the residential private construction. Multi-family building, however, slid 0.4% (+7.9% y/y), the fourth m/m slide in five months, following a 0.4% December rebound; it was 14.9% of the residential private construction. Home improvement building dipped 0.1% (-3.7% y/y), the second m/m decline in three months, following a 1.3% December gain; it was 37.3% of the residential private construction.
Nonresidential private construction slipped 0.1% (+15.2% y/y) in January, the first m/m decline since June 2023, after a 0.1% uptick in December. The January decline reflected m/m drops of these nonresidential private constructions: commercial (-3.3%; +3.1% y/y), educational (-1.3%; +22.6% y/y), amusement & recreation (-1.0%, +9.3% y/y), lodging (-0.8%; +4.4% y/y), transportation (-0.5%; +4.2% y/y), and health care (-0.2%; +14.2% y/y). In contrast, the following nonresidential private constructions rose m/m in January: manufacturing (2.0%, the fourth successive m/m rise; 36.6% y/y), religious (0.7%; 23.5% y/y), communication (0.4%; 2.2% y/y), utilities (0.3%, the seventh straight m/m gain; 10.0% y/y), and office (0.1%, the third successive m/m increase; 4.8% y/y).
The value of public construction fell 0.9% (+20.1% y/y) in January, the first m/m fall since August 2022, after an upwardly revised 2.0% increase in December (+1.3% initially), reflecting a 1.9% gain (16.7% y/y) in residential public construction and a 1.0% drop (+20.2% y/y) in nonresidential public construction. The following nonresidential public constructions dropped m/m in January: public safety (-3.0%; +32.8% y/y), office (-1.4%; +18.0% y/y), water supply (-1.4%; +22.1% y/y), sewage & waste disposal (-1.0%; +21.3% y/y), conservation & development (-0.9%; +5.6% y/y), amusement & recreation (-0.8%; +24.0% y/y), educational (-0.7%; +18.9% y/y), and utilities (-0.3%; +71.4% y/y). Notably, spending on highways & streets, which made up 31.3% of public construction spending, fell 2.1% (+22.2% y/y) in January following nine consecutive m/m rises. To the upside, the following nonresidential public constructions rose m/m in January: transportation (1.4%, the second successive m/m increase; 4.7% y/y), health care (0.6%, the fifth m/m gain in six months; 8.9% y/y), and commercial (0.2%, the fourth m/m rise in five months; 5.8% 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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