Construction Spending Ekes Out Gain in December

US construction spending barely rose in December as spending on nonresidential structures recorded its biggest drop since 2013, suggesting a mild downward revision to the advance fourth-quarter GDP growth estimate.

Leading the way in the annual nonresidential construction spending gain was the hotel sector, which was up 29.1 percent compared with December 2014.

Spending in the construction sector rose to $1.097 trillion in 2015, up 10.5 percent from 2014’s total expenditures of $993.4 billion and the highest yearly level since 2007, when spending stood at $1.148 trillion. Outlays on private residential construction rose 0.9 percent, likely boosted by warm weather.

NAHB analysis of Census construction spending data shows that total private residential construction spending for December increased to a seasonally adjusted annual rate of $430 billion.

The overall construction industry spent a total of about $1.12 trillion in December, up 0.1% month-over-month. Residential construction’s value was $416.8 billion in 2015, 12.6 percent above the 2014 figure of $370.0 billion. Manufacturing, though it slowed down considerably toward the end of 2015-down 7.2 percent for the month in December-was nevertheless up 16.9 percent year-over-year.

Private nonresidential construction fell 2.1 percent to a rate of $394.4 billion, as construction fell broadly across most nonresidential categories. Highway construction jumped 9.4% to a $95.4 billion annual rate.

The NAHB-constructed spending index indicates that recent gains have been driven by the steady increase in multifamily construction spending.