U.S. Construction Spending Falls in December; First M/M Decline Since August
Summary
- Total December construction -0.4% (+7.7% y/y); upward revisions for November (+0.5%) and October (+0.05% from a decline).
- Residential private construction falls 0.3% (+1.7% y/y), down for seven straight months, led by a 2.3% drop (-14.7% y/y) in single-family building.
- Nonresidential private construction declines 0.5% (+15.0% y/y) following seven consecutive m/m rises.
- Public sector construction decreases 0.4% (+11.7% y/y), the first m/m decline in seven months, reflecting drops of 0.5% (-2.2% y/y) in residential public construction and 0.4% (+12.1% y/y) in nonresidential public construction.
The value of construction put in place fell 0.4% m/m in December after a 0.5% gain in November (+0.2% initially) and a 0.05% uptick in October (-0.2% previously), according to the U.S. Census Bureau. The December reading was the first monthly fall since August’s -1.1%. The 7.7% y/y December rise was down from a 11.7% y/y high in February 2022. No change m/m for December had been expected in the Action Economics Forecast Survey. The Fed's aggressive tightening of monetary policy is continuing to weigh on the housing market.
Private construction fell 0.4% (+6.6% y/y) in December after an upwardly revised 0.5% increase in November (+0.3% initially) and a 0.4% drop in October (-0.7% previously). Residential private construction was down 0.3% (+1.7% y/y), the seventh straight monthly decline, after a 0.6% November decrease (-0.5% initially). Single-family building slid 2.3% (-14.7% y/y), the seventh consecutive m/m slide, after a 3.1% November drop. Multi-family building, however, rose 3.2% (20.7% y/y), the sixth m/m rise in seven months, on top of a 3.8% November gain. Home improvement building increased 0.7% (20.4% y/y) following a 1.0% November increase and three successive m/m drops.
Nonresidential private construction fell 0.5% (+15.0% y/y) in December, the first m/m fall since April, after an upwardly revised 2.1% gain in November (+1.7% initially). The December fall reflected drops of 5.4% (-6.7% y/y) in religious construction, 2.4% (+9.7% y/y) in educational private construction, 2.2% (+42.8% y/y) in manufacturing construction, 1.1% (+13.8% y/y) in amusement & recreation private construction, 1.0% (+9.4% y/y) in health care private construction, and 0.3% (+36.7% y/y) in lodging construction. Office private building was virtually unchanged m/m (9.6% y/y) following six successive monthly advances. To the upside, communication private construction rebounded 0.7% (3.0% y/y), the seventh m/m gain in eight months. Transportation private building was up 0.6% (21.7% y/y), the sixth straight monthly increase. Utilities private construction rose 0.5% (-8.6% y/y), the third consecutive m/m rise, following three successive m/m declines. Commercial private construction grew 0.4% (22.6% y/y), the ninth straight m/m gain.
The value of public construction fell 0.4% (+11.7% y/y) in December, the first m/m fall since May, after an upwardly revised 0.6% gain in November (-0.1% initially), with residential public construction down 0.5% (-2.2% y/y) and nonresidential public construction down 0.4% (+12.1% y/y). The following nonresidential public constructions registered their m/m drops in December: conservation & development (-12.0%; +22.5% y/y), office (-3.5%; +5.3% y/y), public safety (-3.0%; +16.1% y/y), health care (-2.7%; +13.8% y/y), water supply (-2.1%; +28.8% y/y), utilities (-1.8%; +5.5% y/y), and education (-0.3%; +5.2% y/y). In contrast, spending on highways & streets, which makes up 30.7% of public construction spending, recovered 1.1% (14.4% y/y) following a 0.7% November decline. The following nonresidential public constructions also rose m/m in December: commercial (2.7%; 25.1% y/y), amusement & recreation (0.5%; 8.5% y/y), sewage & waste disposal (0.4%; 24.5% y/y), and transportation (0.2%; 4.6% 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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