Economy Watch: Construction Spending Edges Down in December

Overall project spending took a small dip for the month, but is still up for the year for both residential and nonresidential construction.
Census Bureau construction spending 1216
Source: U.S. Census Bureau

Construction spending nationwide dropped 0.2 percent in December when compared to November, the Census Bureau reported on Wednesday. The overall drop was because spending on nonresidential projects was down 0.7 percent; residential project spending was up 0.4 percent for the month.

Compared with a year ago, however, construction spending continues to climb. Year-over-year, nonresidential spending was up 4.6 percent; residential spending gained 3.6 percent; and overall construction spending grew 4.2 percent.

Most major commercial property sectors saw increases in construction spending for the month and year, with the exception of lodging, down 4.4 percent for the month, though up 20.8 percent for the year. Office construction gained 2 percent for the month and 35.3 percent for the year. Spending on health care projects was up 1.2 percent for the month and 8.5 percent for the year.

Separately on Wednesday, the Federal Reserve left interest-rate policy unchanged, with the Fed Funds rate range remaining at 0.5 percent to 0.75 percent. The vote was unanimous. The central bank noted that the economy continues its “moderate” pace of expansion, with “solid” job gains and inflation still below the 2 percent.