Total construction spending in January posted the steepest year-over-year increase since 2006, with growth in public construction as well as private residential and nonresidential spending, according to an analysis of new Census Bureau data by the Associated General Contractors of America (AGC).
“Overall construction spending increased in January compared with both December and January 2013 despite uncommonly adverse weather conditions,” says Ken Simonson, the association’s chief economist. “The monthly gains were limited to homebuilding and multifamily residential construction, although private nonresidential work should rebound in the next few months. Public construction is up for now on a year-over-year basis, but funding remains questionable.”
Construction put in place totaled $943 billion in January, 0.1 percent higher than the December total, which was revised up $12 billion from the initial estimate, according to the report. The January mark was 9.3 percent higher than in January 2013, the fastest rate of growth for total construction spending since May 2006. Private residential construction spending increased by 1.1 percent in January and jumped 15 percent over 12 months. Private nonresidential spending slipped 0.2 percent for the month, but rose 9.7 percent compared to January 2013. Public construction spending dropped 0.8 percent for the month, but increased 2.5 percent from a year earlier.
“Contractors are clearly more optimistic about the outlook for private nonresidential markets this year, as shown by their upbeat answers to an AGC survey in January,” Simonson adds. “In addition, apartment construction is still very strong in much of the country, and homebuilding should remain positive.”