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Economy in Brief

U.S. Construction Spending Continues to Improve During December
by Tom Moeller  February 1, 2021

• Overall activity hits record high. 

• Residential building surge led by single-family sector.

• Public sector building edges higher.

The value of construction put-in-place increased 1.0% during December (5.7% y/y) following November's 1.1% gain, revised from 0.9%. October's increase was revised to 2.5% from 1.6%. A 0.8% December increase had been expected in the Action Economics Forecast Survey. During all of 2020, construction activity rose 4.7% versus a 2.4% gain in 2019.

Private construction increased 1.2% (6.5% y/y) in December following a 1.5% November increase. Residential construction jumped 3.1% (20.7% y/y) as single-family building surged 5.8% (23.5% y/y), the sixth consecutive month of notably strong increase. The value of multi-family construction was little changed (17.8% y/y) for the second month. Home improvement expenditures edged 0.4% higher (17.7% y/y) after little change during November.

Weakness in business spending continued as nonresidential private construction fell 1.7% in December (-9.8% y/y), the sixth consecutive monthly decline. Lodging construction declined 6.4% (-24.6% y/y) while commercial building weakened 2.8% (-1.4% y/y). Manufacturing construction fell 5.6% (-17.6% y/y) while education construction eased 0.8% (-15.3% y/y). To the upside, transportation building rose 2.2% (-1.6% y/), strong for the fourth straight month. Office building improved 0.2% (-3.3% y/y) about as it did in November.

Public construction rose 0.5% during December (3.0% y/y) following a 0.1% November slip. Spending on highways & streets, which makes up nearly one-third of public spending, rose 0.9% (3.9% y/y) and outlays on health care units improved 0.4% (4.7% y/y). Power construction eased 0.5% (-15.2% y/y) while spending on educational buildings gained 0.6% (4.5% y/y).

The construction spending figures, some of which date back to 1946 can be found in Haver's USECON database. The expectations reading is in the AS1REPNA database.

Construction Put in Place (SA, %) Dec Nov Oct Dec Y/Y 2020 2019 2018
Total 1.0 1.1 2.5 5.7 4.7 2.4 4.2
  Private 1.2 1.5 2.4 6.5 4.7 0.8 4.0
    Residential 3.1 3.0 4.8 20.7 11.6 -2.4 3.4
    Nonresidential -1.7 -0.6 -0.7 -9.8 -3.0 4.5 4.8
  Public 0.5 -0.1 2.6 3.0 4.8 7.8 4.6
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