Construction Spending Falls Slightly in January
While monthly residential spending fell 0.5% in January, non-residential construction spending rose 0.1% in the same time period.
Source: U.S. Census Bureau
Total construction spending fell 0.2% in January, according to a report released by the U.S. Census Bureau, with year-over-year spending up 3.3%. Monthly residential spending fell 0.5%, while non-residential rose 0.1% in the same time period.
“The decline in spending in January is likely to worsen, as uncertainty about tariffs, interest rates and inflation is causing investors and developers to delay or scale back projects,” says Ken Simonson, chief economist at Associated General Contractors of America. “Short-term futures prices for metals and petroleum products, along with suppliers' price announcements, have already signaled construction costs will be rising. Tariffs and port charges on Chinese ships will add even more to costs and uncertainty about the viability of many projects.”
Monthly private non-residential construction spending stayed flat overall, while public non-residential spending rose 0.2%.
“Non-residential construction spending rebounded slightly in January, yet this report is far from encouraging,” said Anirban Basu, chief economist at Associated Builders and Contractors, in a press release, noting that data center construction accounted for more than 75% of the increase. “While that segment is so hot that it can melt through the effects of high interest rates, many other categories appear to be frozen in place. Even manufacturing, which still accounts for nearly $1 in every $5 of nonresidential construction spending, is virtually unchanged since May of last year.”
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