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Report: Construction spending up to start 2021

By |  March 2, 2021

AGCA

Construction spending totaled $1.52 trillion in January, an increase of 1.7 percent from December and a 5.8 percent improvement from the same period of a year earlier, according to an analysis of government data from the Associated General Contractors of America (AGC).

In January, residential construction climbed 2.5 percent for the month and 21 percent year-over-year, while combined public and private nonresidential spending gained 0.9 percent over the month and 5 percent year-over-year.

“Despite a modest upturn in January, spending on private nonresidential construction remained at the second-lowest level in more than three years and was 10 percent below the January 2020 spending rate,” says Ken Simonson, AGC’s chief economist. “All 11 of the private nonresidential categories in the government report were down compared to a year earlier.”

Private nonresidential construction

Private nonresidential construction spending saw a 0.4 percent uptick in January, compared to the prior month.

Power construction – the largest private nonresidential segment – dropped 0.8 percent in January and 10 percent year-over-year.

In addition, commercial construction was down 1.8 percent for the month and 8.3 percent year-over-year, while office construction was down 0.2 percent in January and 4.4 percent year-over-year.

Manufacturing construction gained 4.9 percent in January but remained down 14.7 percent compared to January 2020.

Public construction

Public construction spending jumped 1.7 percent in January compared to the prior month and 2.9 percent year-over-year.

By segment, highway and street construction climbed 5.8 percent for the month and 6.5 percent year-over-year; education construction was down 0.1 percent in January, but still gained 0.9 percent year-over-year; and transportation facility construction dropped 1 percent for the year and 0.6 percent for the month.

Private residential construction

January marked eight straight months of gains for private residential construction spending. The segment boomed 21 percent year-over-year and 2.5 percent in January, compared to the prior month.

More specifically, single-family homebuilding rocketed 24.2 percent year-over-year and 3 percent for the month, while multifamily construction spending jumped 16.9 percent year-over-year and 0.7 percent in January.

Zach Mentz

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