U.S. construction spending in December reached $1.16 trillion at a seasonally adjusted annual rate, up 1 percent from November and 8.1 percent from December 2004, setting a record for the sixth straight month, according to Census Bureau figures.
“As was the case for most of the year, growth was well distributed among the major construction segments,” said Ken Simonson, chief economist for the Associated General Contractors of America. Comparing December 2005 to December 2004, public construction grew 10 percent, private residential construction rose 9 percent and private nonresidential building was up 6 percent.
Both single and multi-family home construction increased in December despite fears housing had finally begun to turn down. Compared to November, the two segments were up .2 percent and 1 percent, respectively. For the year, single-family home construction jumped 14 percent while multi-family home construction increased 20 percent.
Manufacturing facility construction was the best-performing private nonresidential segment in 2005 with a 21 percent year-over-year gain. “I expect another strong year in 2006,” Simonson said. “Today’s report on manufacturing from the Institute for Supply Management adds to my belief that more companies will opt to build or expand plants.”
Highway and street construction dipped in December, but still finished the year 11 percent ahead of the 2004 total. Simonson said this total was distorted by large increases in costs for concrete, asphalt and diesel fuel, which he says are likely to drain federal and state highway trust funds in 2006, Simonson said. (To read a related article about the future of the federal highway program, click here.