Construction spending increased 1.3% from December to January, with most of the gains coming in either multi-family or nonresidential projects, according to analysis of government data by the Associated General Contractors of America (AGC). The gains in the multi-family and nonresidential sectors offset the continued slump in spending for single-family-home building. The AGC reports spending figures are consistent with contractor reports of strong demand for their services.
“The data are consistent with general contractors’ reports that they were busy early in the year and expect to stay that way through 2019,” AGC chief economist Ken Simonson said. “These early figures fit with what contractors say they expect for the full year.”
Construction spending reached $1.28 trillion in January, 0.3 percentage point increase compared to January 2018. Simonson said the modest year-over-year increase masks the disparity between home building and other segments of the industry. Private residential spending declined 5.6% year over year compared to January 2018, while single-family construction spending decreased 7.2%.
Despite positive signs in private nonresidential and public construction spending, AGC officials exercised caution. February employment data showed a decline of 31,000 jobs for the construction sector.