US Nonresidential Construction Spending Declines in January, Ending 19 Consecutive Monthly Gains

On Friday, the Associated Builders and Contractors (ABC) reported that US nonresidential construction spending declined 0.4% month-over-month in January. On a seasonally adjusted annual basis, nonresidential spending totaled $1.190 trillion.

According to ABC’s analysis of the Census Bureau data, spending was down on a monthly basis in 10 of the 16 nonresidential subcategories in January. Private nonresidential spending fell 0.1%, while public nonresidential spending fell 1.0%.

In remarks and analysis accompanying the report, ABC Chief Economist Anirban Basu said:

“Nonresidential construction spending fell sharply in January, ending a 19-month streak of monthly gains. Some of this decrease is due to weather-related factors. That’s especially true in infrastructure categories like highway and street and water supply, both of which exhibited steep declines in spending to start the year but should remain elevated through 2024.

Construction spending in the manufacturing category, on the other hand, continued to surge in January. Manufacturing now accounts for nearly $1 of every $5 of nonresidential construction spending.

Despite January’s disappointing data, nonresidential construction spending is still up more than 17% over the past year. Given that year-over-year strength and the fact that a majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, spending is likely to rebound over the coming months.”