The U.S. Census Bureau reported that construction spending during January 2019 was estimated at a seasonally adjusted annual rate of $1,279.6 billion, 1.3 percent (±0.8 percent) above the revised December estimate of $1,263.1 billion.
The January figure is 0.3 percent (±1.2 percent) above the January 2018 estimate of $1,276.3 billion.
In January, the estimated seasonally adjusted annual rate of public construction spending was $313.6 billion, 4.9 percent (±1.6 percent) above the revised December estimate of $299.0 billion.
- Highway construction was at a seasonally adjusted annual rate of $99.9 billion, 11.8 percent (±5.1 percent) above the revised December estimate of $89.3 billion.
- Educational construction was at a seasonally adjusted annual rate of $77.8 billion, 2.2 percent (±2.0 percent) above the revised December estimate of $76.1 billion.
Spending on private construction was at a seasonally adjusted annual rate of $966.0 billion, 0.2 percent (±0.7 percent) above the revised December estimate of $964.2 billion.
- Residential construction was at a seasonally adjusted annual rate of $511.4 billion in January, 0.3 percent (±1.3 percent) below the revised December estimate of $512.9 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $454.7 billion in January, 0.8 percent (±0.7 percent) above the revised December estimate of $451.2 billion.
“The data are consistent with general contractors’ reports that they were busy early in the year and expect to stay that way through 2019,” said Ken Simonson, Associated General Contractors chief economist. “These early figures fit with what contractors say they expect for the full year, as the association’s survey in January revealed.”
“While 2019 started off strong, the February jobs figures make it clear that federal officials should not take it for granted that the construction sector is immune to infrastructure funding cuts,” said Stephen E. Sandherr, the association’s chief executive officer. “The best way to ensure the sector continues to add high-paying jobs is for Congress to act quickly to boost funding to improve our aging and over-burdened infrastructure systems.”
An uptick in investment in certain infrastructure categories has been at the center of the ongoing nonresidential construction spending cycle,” said Associated Builders and Contractors Chief Economist Anirban Basu. “During the past year, construction spending has increased at rapid rates in conservation and development, highway and street, and transportation. While there has been much discussion about expanding infrastructure investment at the federal level, most of that investment has taken place at a state and local level, especially as government finances have improved in much of the nation, therefore supplying more support for infrastructure outlays. Significant job growth also has helped bolster income tax collections while rising real estate values have triggered improved property tax collections.
“Meanwhile, still reasonably strong consumer spending has helped support growing construction in segments like lodging,” said Basu. “Construction of data and fulfillment centers also has created demand for nonresidential construction services. The recent moderation in construction materials price increases has helped support construction starts because more developers and their financiers are concluding that new projects make business sense.
“While there has been some reduction in business and consumer confidence, the nonresidential construction spending cycle remains firmly in place for now,” said Basu. “Despite the recent dip in ABC’s Construction Backlog Indicator, backlogs remain sufficient to support solid nonresidential spending activity through the balance of 2019. And while many economists remain concerned about economic prospects in 2020 and beyond, nonresidential construction’s outlook remains benign at least into 2021.”