Nonresidential construction spending decreased 0.4% from December 2023 to January and is up 17.1% compared with January 2023, according to Associated Builders and Contractors.
For public construction, spending decreased 1% for the month and is up 20.2% year to date. Private nonresidential spending fell 0.1% from December 2023 to January and is up 15.2% year to date. Spending was down for the month in 10 of the 16 nonresidential subcategories.
“Nonresidential construction spending fell sharply in January, ending a 19-month streak of monthly gains,” said ABC Chief Economist Anirban Basu. “Some of this decrease is due to weather-related factors. That’s especially true in infrastructure categories like highway and street and water supply, both of which exhibited steep declines in spending to start the year but should remain elevated through 2024.
“Construction spending in the manufacturing category, on the other hand, continued to surge in January,” Basu continued. “Manufacturing now accounts for nearly $1 of every $5 of nonresidential construction spending.”
Basu said he expects construction spending to rebound during the coming months.
“Despite January’s disappointing data, nonresidential construction spending is still up more than 17% over the past year,” Basu said. “Given that year-over-year strength and the fact that a majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, spending is likely to rebound over the coming months.”
