Economy Watch: Construction Spending Stands Pat in January

Construction in some major property types were down for the month, including office and industrial, according to a recent U.S. Census Bureau report.
Source: U.S. Census Bureau, Monthly Construction Spending, January 2018
Source: U.S. Census Bureau, Monthly Construction Spending, January 2018

U.S. construction spending during January 2018 came in at an annualized rate of $1,262.8 billion, nearly the same as the revised December total of $1,262.7 billion, the Census Bureau reported on Friday. The January figure is, however, 3.2 percent above the January 2017 total.

Spending on private construction dropped for the month, coming in 0.5 percent below the revised December total. Compared with a year ago, however, private construction spending gained 1.7 percent. As for public construction, that edged up for the month, with the annualized rate of public construction spending 1.8 percent above the revised December total. For the year, public construction spending was up 8.2 percent.

Sector Specifics

Total residential construction spending eked out a gain of 0.2 percent for the month, and a more robust gain of 4.3 percent for the year. Total nonresidential construction was down 0.1 percent for the month in January, but up 2.4 percent for the year.

Some major nonresidential construction spending categories were down for the month. For instance, office construction was off 1.3 percent, while “commercial” (which includes industrial) was down 1.8 percent, according to the bureau. On the other hand, spending on hotel projects was up 1.2 percent for the month, and health care construction spending advanced 1.5 percent.

For the year, office construction was off 2.7 percent, while “commercial” was up 6.4 percent. Spending on hotel projects was up 10.5 percent for the year, and health care construction spending advanced 11.7 percent. For the year, spending on transportation was on fire, up 20.2 percent. That doesn’t just represent public projects, which saw spending increase by 12.4 percent, but also private transportation projects, up 36.6 percent compared with January 2017.