Construction spending rose a strong 10.5% for full-year 2015, to nearly $1.1 trillion, but December’s total edged up a mere 0.1% from the previous month’s total, the U.S. Census Bureau has reported.
The bureau, part of the Commerce Dept., also reported on Feb. 1, that the projected value of construction projects finished in December climbed 8.2% year over year to a seasonally adjusted annual rate of about $1.12 trillion.
For all of 2015, private construction projects put in place last year totaled $806.1 billion, a 12.3% gain from 2014. Public construction increased just 1.9%, to $292.5 billion.
Total nonresidential construction posted a 9% upturn last year, to $674.1 billion. Residential projects rose 12.8%, to $423.2 billion, the Census Bureau said.
The strongest nonresidential segments last year included manufacturing, which surged 44.5% to $83.5 billion; lodging, which soared 30.7% to $21.1 billion; amusement-recreation, which recorded a 24.4% increase to $20.7 billion; and office buildings, which jumped 22%, to $56.2 billion.
Only two categories declined in full-year 2015. Power, the largest nonresidential segment, dropped 14% to $87.1 billion; and public safety, which was off 5.1% to $8.9 billion, according to the bureau.
Looking at month-to-month comparisons, just three of the 16 nonresidential segments showed December upticks: communication, up 4%; sewage-waste disposal, which gained 1.3%; and amusement-recreation, which edged up 0.5%. Residential increased just 0.7%.
December’s year-over-year comparisons were brighter, with residential rising 8.1% from December 2014 levels and 10 nonresidential categories recording increases. They were led by communication, which soared 37.2%; lodging, up 29.1%; and manufacturing, which climbed 19.6%.
Ken Simonson, Associated General Contractors of America’s chief economist, said in a statement that residential construction showed strong growth and highways and other public-sector segment also increases. Simonson added, “ But spending on most private nonresidential categories has stalled or turned negative in the past several l months.”
He said, “Contractors still say they are very busy now but uncertainty over the economy may mean new projects dry up.”
At the Associated Builders and Contractors, which focuses on the industry’s nonresidential sector, Chief Economist Anirban Basu said in a statement, “A number of leading indicators suggest that nonresidential construction spending performance will remain choppy moving forward….” Basu did note, “Most firms continue to report healthy backlog and hiring remains aggressive, implying that many firms are staffing up in order to perform on forthcoming contractual opportunities.”
Still, he sees some worrisome signs, including tighter credit and a rise in consumer delinquencies and corporate bond defaults, which could slow contractors’ backlog growth.
As the death toll from the record-setting hurricane mounts in the Bahamas and damage estimates there and in the U.S. head into the billions, industry experts see increasing pressure to address infrastructure resilience.