Nonresidential construction spending expanded 0.4 percent on a monthly basis in December 2014, according to the February 2, 2015, release from the U.S. Census Bureau. Spending for the month totaled $627.1 billion on a seasonally adjusted, annualized basis, 5.9 percent higher than December 2013. The government also upwardly revised November's spending estimate from $617 billion to $624.8 billion and October's figure from $623 billion to $627.4 billion.
"Despite the slight expansion indicated in today's report, nonresidential construction lost some of its momentum during the final two months of 2014; however, this should represent only a minor dip in the industry's momentum headed into 2015," said Associated Builders and Contractors Chief Economist Anirban Basu. "It is possible that the past two spending reports indicate the U.S. economy is not as robust as many analysts believe, but it is important to remember that 2014, as whole, was a solid year of recovery for the industry and total nonresidential construction spending was 6.6 percent higher than in 2013.
"While some may surmise that the lack of momentum in nonresidential construction spending is related to the sharp fall in oil prices, this does not appear to be the case," said Basu. "Oil-related construction categories like transportation and manufacturing have retained their momentum while categories such as public safety and education have experienced declines in spending. It is also possible that the decline simply represents noise in the data; after all, October and November's figures have been revised higher while the December estimate remains preliminary."
Seven of 16 nonresidential construction subsectors posted increases in spending in December on a monthly basis:
- Communication construction spending expanded 2.5 percent for the month but is down 9.5 percent for the year.
- Highway and street-related construction spending grew 2.5 percent in December and is up 10.5 percent compared to the same time last year.
- Power-related construction spending grew 1 percent for the month but is 8.3 percent lower than the same time one year ago.
- Conservation and development-related construction spending grew 1.7 percent for the month and is up 24 percent on a yearly basis.
- Office-related construction spending grew 1.7 percent in December and is up 17.6 percent from the same time one year ago.
- Manufacturing-related spending expanded by 2 percent in December and is up 18.1 percent for the year.
- Amusement and recreation-related construction spending gained 1.9 percent on a monthly basis and is up 11.9 percent from the same time last year.
Spending in nine nonresidential construction subsectors declined in December on a monthly basis:
- Health care-related construction spending fell 1 percent for the month and is down 2.1 percent for the year.
- Education-related construction spending fell 1.2 percent for the month but is up 3.9 percent on a year-over-year basis.
- Spending in the water supply category fell 0.3 percent from November but is 10.1 percent lower than at the same time last year.
- Construction spending in the transportation category fell 0.2 percent on a monthly basis but has expanded by 9.5 percent on an annual basis.
- Public safety-related construction spending fell 4 percent on a monthly basis and is down 9.5 percent on a year-over-year basis.
- Commercial construction spending lost 1.7 percent in December but is up 10.7 percent on a year-over-year basis.
- Religious spending fell 4.1 percent for the month and is down 1.3 percent from the same time last year.
- Lodging construction spending fell 1.4 percent on a monthly basis but is up 18.3 percent on a year-over-year basis.
- Sewage and waste disposal-related construction spending fell 2 percent for the month but has grown 10.5 percent on a 12-month basis.
View the November spending report.