Construction spending increased 1.6% from December 2019 to January and is up 5.1% compared with January 2019, according to www.abc.org.
For public construction, spending increased 2.6% for the month and is up 12.3% year-to-date. Private nonresidential spending rose 0.8% from December 2019 to January and is up 0.5% year-to-date.
“Despite all the focus on the dislocating impacts of the coronavirus, construction—a key element of the U.S. economy—continues to perform,” says Anirban Basu, chief economist for Associated Builders and Contractors. “For the first time in history, the volume of nonresidential construction spending exceeded $800 billion on an annualized basis and now stands at an all-time high. Both public and private nonresidential construction spending expanded to start 2020, a reflection of the broader economic momentum evident over the last several years. Backlog remains healthy, according to the ABC Construction Backlog Indicator, and with the nation continuing to add jobs, there is more demand for public and private construction and additional funding resources. This is especially apparent in several infrastructure categories, in which spending growth continues to be robust due to healthier state and local government finances.
“That said, there is no question that the coronavirus has significantly compromised both global and national economic momentum over the past two to three weeks,” Basu continues. “U.S. manufacturing and shipping segments have begun to soften, with significant reductions in container volume already being reported at several major U.S. ports. While the crisis is expansive enough to potentially drive the economy into recession, the question is whether the crisis is severe enough to countervail current U.S. economic momentum.”
