Construction Spending Dips in December
Construction spending declined slightly to end 2019. According to the Census Bureau, December spending dipped 0.2% below the revised November estimate. However, construction spending in December was 5% above that of December 2018.
"A solid gain in residential spending was not enough to offset a drop in nonresidential," states a release from Wells Fargo Securities. "Overall spending for 2019 was 0.3% below 2018 levels, the weakest outcome since 2011."
Private construction outlays were only a tenth of a percent behind November, while public spending was 0.4% below the previous month. Within private construction residential spending improved 1.4% in December, but was offset by a 1.8% decline in nonresidential construction.
While numbers were down from month-to-month, year-over-year spending showed a bit of promise. Residential and nonresidential were each ahead of December 2018 numbers as was total private construction. Total public construction was 11.5% better than the previous year.
"The fundamentals appear to be improving, however, and there are a number of encouraging developments pointing to better days ahead for construction," continued Wells Fargo. "While finding labor remains a challenge, lower builder material prices and lower interest rates should produce a friendlier environment for construction in 2020."
-Michael Miller, managing editor