U.S. Construction Spending Unexpectedly Declines in January
Summary
- Headline -0.3% m/m, first monthly decrease in three mths.; +1.0% y/y for the second straight mth.
- Residential private construction -0.8% m/m, led by a 1.4% drop in home improvement building.
- Nonresidential private construction -0.4% m/m, sixth fall in seven months.
- Public construction +0.6% m/m, driven by a 0.6% rebound in nonresidential public building.
The value of construction put in place unexpectedly fell 0.3% m/m in January to a seasonally adjusted annual rate of $2,190.4 billion, the first m/m fall since October, after upwardly revised gains of 0.8% in December (+0.3% initially) and 0.6% in November (-0.2% previously), data from the U.S. Census Bureau showed. A 0.1% m/m January increase had been expected in the Action Economics Forecast Survey. The year-on-year rate held at 1.0% in January and December following 10 consecutive y/y declines (+0.4% in January 2025), remaining well below a high of 12.9% in December 2023 and a peak of 18.4% in April 2022.
Private construction declined 0.6% (-0.1% y/y) to $1,661.2 billion in January, the first m/m decrease since October, after a 1.0% increase in December (+0.5% previously). Residential private construction fell 0.8% (+2.3% y/y) to $933.0 billion in January, down for the first time in three months, after a 2.5% gain in December (+1.5% initially). Single-family building slid 0.2% (-5.8% y/y), the 10th m/m slide in 11 months, following a 1.3% December rise; it was 43.9% of the residential private construction. Multi-family building fell 0.7% (+0.4% y/y) after a 0.6% December decline; it was 12.3% of the residential private construction. Home improvement building dropped 1.4% (+12.5% y/y), the first m/m fall since September, after a 4.7% December advance; it was 43.7% of the residential private construction.
Nonresidential private construction fell 0.4% (-3.0% y/y) to $728.2 billion in January, the fourth successive m/m fall and the sixth in seven months, on top of a 0.8% drop in December (-0.7% initially). The January decline reflected m/m decreases across several nonresidential private construction categories, led by manufacturing (-2.0%; -15.0% y/y), followed by educational (-1.1%; +6.3% y/y), religious (-1.1%; +8.3% y/y), amusement & recreation (-0.9%; +10.9% y/y), transportation (-0.2%; +4.6% y/y), and commercial (-0.1%; -0.7% y/y). To the upside, the following nonresidential private constructions rose m/m in January, led by office (+1.1%; +4.8% y/y), followed by health care (+0.4%; -1.8% y/y), communication (+0.2%; +0.4% y/y), and lodging (+0.1%; +0.6% y/y). Meanwhile, utilities private construction was virtually unchanged (+3.4% y/y) in January after five consecutive m/m gains.
The value of public construction rose 0.6% (4.5% y/y) to $529.2 billion in January, the second m/m rise in three months, after a 0.1% downtick in December (-0.5% initially), reflecting a flat reading (+6.8% y/y) in residential public construction and a 0.6% rebound (4.5% y/y) in nonresidential public construction. Several nonresidential public construction categories increased m/m in January, led by spending on highways & streets (+3.3%; +4.1% y/y), which accounted for 28.1% of total public construction spending, followed by conservation & development (+3.1%; +12.2% y/y), health care (+0.8%; +4.6% y/y), and transportation (+0.1%; +5.0% y/y). In contrast, the following public constructions fell m/m in January, led by commercial (-3.7%; +5.2% y/y, followed by office (-1.8%; -3.9% y/y), public safety (-1.8%; +1.1% y/y), utilities (-1.7%; +2.3% y/y), water supply (-0.8%; +9.1% y/y), amusement & recreation (-0.3%; +8.6% y/y), educational (-0.2%; +0.3% y/y), and sewage & waste disposal (-0.2%; +10.9% 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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