The U.S. Census Bureau of the Department of Commerce announced that construction spending during December 2015 was estimated at a seasonally adjusted annual rate of $1,116.6 billion, 0.1 percent (±1.2 percent) above the revised November estimate of $1,116.0 billion. The December figure is 8.2 percent (±1.8 percent) above the December 2014 estimate of $1,031.6 billion.
The value of construction for the full year 2015 was $1,097.3 billion, 10.5 percent (±1.2 percent) above the $993.4 billion spent in 2014.
In December, the estimated seasonally adjusted annual rate of public construction spending was $292.5 billion, 1.9 percent (±2.0 percent) above the revised November estimate of $287.1 billion. Highway construction was at a seasonally adjusted annual rate of $95.4 billion, 9.4 percent (±4.4 percent) above the revised November estimate of $87.2 billion.
The value of public construction in 2015 was $291.2 billion, 5.6 percent (±1.6 percent) above the $275.7 billion spent in 2014. Highway construction was $89.6 billion, 6.7 percent (±3.9 percent) above the $84.0 billion in 2014.
Spending on private construction was at a seasonally adjusted annual rate of $824.0 billion, 0.6 percent (±0.8 percent) below the revised November estimate of $828.8 billion.
- Residential construction was at a seasonally adjusted annual rate of $429.6 billion in December, 0.9 percent (±1.3 percent) above the revised November estimate of $425.8 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $394.4 billion in December, 2.1 percent (±0.8 percent) below the revised November estimate of $403.0 billion.
The value of private construction in 2015 was $806.1 billion, 12.3 percent (±1.5 percent) above the $717.7 billion spent in 2014. Residential construction in 2015 was $416.8 billion, 12.6 percent (±2.1 percent) above the 2014 figure of $370.0 billion and nonresidential construction was $389.3 billion, 12.0 percent (±1.5 percent) above the $347.7 billion in 2014.
According to Patrick Newport, U.S. Economist, IHS Global Insight, the key concept in this report, core construction (single-family, multifamily, state and local government, and private nonresidential construction.), was about “a flat fourth quarter,” he said, “despite two quarters of solid growth.
“Single-family (up 1.0 percent) and multifamily construction (up 2.7 percent) both posted solid gains,” he said. “The outlook for residential construction this year is for further solid gains based on a pickup in household formation by young adults.”
Nine of the 11 private nonresidential categories were in the red in December. “For the quarter, nonresidential spending growth slowed to 2.9 percent (annual rate) following 41 percent and 11 percent annualized gains in the two prior quarters,” Newport said. “Manufacturing, down 7.3 percent for the month, particularly chemical manufacturing (down 8.4 percent), may be in the initial stages of a sharp correction.”
“Public construction increased 1.9 percent in December, but that was not enough to avoid an 8.6 percent annualized drop for the fourth quarter,” Newport concluded. “The change in core construction was about $7.0 billion less than the Bureau of Economic Analysis assumed in the advanced GDP report. As a result, fourth quarter real GDP growth will be downgraded about 0.15 percentage points.”