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AGC: Construction spending rises in November

Jan. 16, 2024
Construction spending surpasses $2.05 trillion in November after a 0.4% month-over-month increase, with homebuilding gains offsetting declines in public projects

Total construction spending increased by 0.4% in November as a pickup in homebuilding and some private nonresidential markets offset a downturn in public spending, according to a recent analysis of federal spending data by the Associated General Contractors of America.

“Private construction spending is showing renewed vigor in homebuilding and selected private nonresidential categories, while developer-financed spending languishes,” Ken Simonson, the association’s chief economist, said in a news release.

“Unfortunately, public construction spending appears to have stalled.”

Construction spending, not adjusted for inflation, totaled $2.050 trillion at a seasonally adjusted annual rate in November. That figure is 0.4% above the upwardly revised October rate. Spending on private residential construction rose by 1.1%, as single-family construction climbed for the seventh-straight month, by 2.9%. Spending on multifamily projects edged up 0.1%.

Spending on private nonresidential construction rose 0.2% in November, the fifth consecutive monthly increase. The largest segment, manufacturing construction, climbed 0.5%. Among other large private categories, commercial construction—comprising warehouse, retail, and farm projects—declined 0.5%, while investment in power, oil, and gas projects rose 0.8%. Spending on offices and data centers, as well as private health care facilities, was virtually unchanged.

Public construction spending slumped 2.2% in November despite a minimal 0.1% increase in the largest category, highway and street construction. Spending on educational structures slipped 0.3%. Spending on transportation facilities fell 1.0%. Spending on other infrastructure categories tumbled even more: 1.6% for sewage and waste disposal, 1.4% for water supply, and 4.4% for conservation and development.

Association officials said the new construction spending data was helpful for understanding what has been happening in the industry. They added, however, that AGC’s recently released 2024 outlook shows where contractors expect demand for construction to expand and to contract this year.

“Understanding what has happened to the industry is important, but knowing what will happen is even more important,” AGC CEO Stephen E. Sandherr said.

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