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U.S. construction spending slips in January

0 33 Economic

by DCN News Services

ARLINGTON, VA. — U.S. construction spending dropped from December to January but increased modestly from a year ago, as private construction grew solidly but public infrastructure outlays tumbled, according to analysis by the Associated General Contractors of America.
U.S. construction spending slips in January

Association officials said in a media statement the January data indicates the need for new public investments in infrastructure along the lines of the trillion-dollar proposal President Donald Trump outlined during his Congressional address on Feb. 28.

"These numbers suggest that demand for residential and private nonresidential structures remain strong but all levels of government are struggling to fund needed projects," said Ken Simonson, the association's chief economist.

"It appears that homebuilding, office and power construction will continue to grow through 2017, while manufacturing, highway and other transportation construction are likely to hold down overall growth."

Construction spending in January totalled $1.18 trillion at a seasonally adjusted annual rate. The January rate was down 1.0 per cent from the month before but up 3.1 per cent from the January 2016 level.

Private residential construction spending increased by 0.5 per cent between December and January and rose 5.9 per cent over the past 12 months.

Spending on multifamily residential construction jumped 2.2 per cent for the month and 9.0 per cent year-over-year, while single-family spending climbed 1.1 per cent for the month and 2.3 per cent from a year earlier.

Private nonresidential construction spending was flat for the month and increased 8.9 per cent year-over-year. The largest private nonresidential segment in January was power construction (including oil and gas pipelines), which gained 1.4 per cent for the month and 5.8 per cent over 12 months.

The next-largest segment, commercial (retail, warehouse and farm) construction, declined 0.5 per cent in January but rose 12 per cent year-over-year. Manufacturing construction rose 0.6 per cent for the month but fell 6.8 per cent from a year before. Private office construction spending dipped 0.5 per cent for the month but gained 34 per cent compared with January 2016.

Public construction spending plunged by 5.0 per cent from December to January and 9.0 per cent from the January 2016 rate. Infrastructure categories were especially hard hit. Highway construction shrank 3.3 per cent for the month and 10 per cent year-over-year. Other transportation segments (transit, passenger rail, airports and ports) tumbled 8.1 per cent for the month and 12 per cent relative to January 2016. Sewage and waste construction plummeted by 4.2 per cent and 27 per cent, respectively. Water supply spending declined 12 per cent and 11 per cent, respectively.

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