Construction Spending Rises for Month, Full-Year 2023

Construction spending during December 2023 was estimated at a seasonally adjusted annual rate of $2,096.0 billion, 0.9% (± 0.8%) above the revised November estimate of $2,078.3 billion. The December figure is 13.9% (±1.5%) above the December 2022 estimate of $1,840.9 billion.

The value of construction in 2023 was $1,978.7 billion, 7.0% (±1.0%) above the $1,848.7 billion spent in 2022.

In December, the estimated seasonally adjusted annual rate of public construction spending was $476.3 billion, 1.3%(±1.5%) above the revised November estimate of $470.3 billion.

Highway construction was at a seasonally adjusted annual rate of $151.2 billion, 4.1% (±3.6%) above the revised November estimate of $145.2 billion. Educational construction was at a seasonally adjusted annual rate of $100.3 billion, 0.1% (±2.1%) below the revised November estimate of $100.4 billion. 

The value of public construction for full-year 2023 was $437.7 billion, 16.3% (±1.6%) above the $376.3 billion spent in 2022. Highway construction was $133.6 billion, 18.0% (±3.9%) above the $113.3 billion in 2022, educational construction in 2023 was $93.0 billion, 11.9% (±3.6%) above the 2022 figure of $83.1 billion. 

Spending on private construction was at a seasonally adjusted annual rate of $1,619.7 billion, 0.7% (±0.7%) above the revised November estimate of $1,608.0 billion. Residential construction was at a seasonally adjusted annual rate of $911.7 billion in December, 1.4% (±1.3%) above the revised November estimate of $898.8 billion. Nonresidential construction was at a seasonally adjusted annual rate of $708.0 billion in December, 0.2% (±0.7%) below the revised November estimate of $709.2 billion.

The value of private construction for full-year 2023 was $1,541.0 billion, 4.7% (±1.2%) above the $1,472.4 billion spent in 2022. Residential construction in 2023 was $864.9 billion, 5.8% (±2.1%) below the 2022 figure of $917.9 billion and nonresidential construction was $676.0 billion, 21.9% (±1.2%) above the $554.5 billion in 2022.

“Construction spending rose across the board in 2023 despite higher interest costs, shortages of workers, and delays in awarding federal money for infrastructure,” said Ken Simonson, Associated General Contractors of America (AGC) chief economist. “These challenges remain in early 2024 but the industry is poised for further growth overall.”

Public construction spending increased 1.3% in December and 21.3% from a year earlier, AGC noted. Spending on the largest public category, highways and streets, as noted jumped 4.1% for the month, while outlays for educational structures slipped 0.1%. Spending on transportation facilities rose 1.1%. Other infrastructure segments were mixed: sewage and waste disposal declined 0.8% and water supply spending slumped 2.5% but conservation and development outlays rose 1.4%.

“Nonresidential construction spending finished 2023 up more than 20% – the 19th consecutive monthly increase – and will carry ample momentum in 2024,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “While much of that strength is due to surging investment in new manufacturing structures, roughly half of the 16 nonresidential subsegments saw spending increases by 20% or more in 2023.

“That said, privately financed nonresidential activity actually declined in December, albeit by just 0.2%,” said Basu. “That decrease in private activity was offset by surging activity in the highway and street category, which along with other publicly financed segments will retain momentum in the coming months as infrastructure investments are finally put in place.” 

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