US nonresidential construction spending decreased by 0.5% in December, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. Nonresidential spending totalled $943.5bn for the month on a seasonally adjusted annualised basis.
Spending fell monthly in 10 of the 16 nonresidential subcategories. Private nonresidential spending was down 0.5%, while public nonresidential construction spending was down 0.4% in December.
“Nonresidential construction spending fell in December, ending a streak of six straight monthly increases,” said ABC Chief Economist Anirban Basu.
“Despite the decline, nonresidential spending is up 13.8% year over year, an increase outpacing both overall inflation (6.4%) andmaterials prices inflation (+7.6%). More than half of the increase in nonresidential construction over the past year is due to heightened activity in two segments: manufacturing, as megaprojects begin across the nation, and commercial, a category that includes warehouse- and distribution-related construction.
“While contractors remain reasonably confident, according toABC’s Construction Confidence Index, there is reason for caution,” said Basu. “Worker shortagesremain a challenge for contractors, and elevated interest rates have increased borrowing costs, making certain projects unfeasible at the margins while also driving the economy toward a potential recession this year.”
