WASHINGTON – December brought a modest uptick in nationwide construction activity, with spending climbing 0.3% as single-family home projects and renovation work provided a boost to the sector.
Friday’s report from the Commerce Department’s Census Bureau showed the December gain followed a 0.2% drop in November spending. The growth matched what economists had predicted, though construction activity remained 0.4% lower than the same period a year earlier. Officials noted the data release was pushed back due to the previous year’s federal government shutdown.
Private construction projects saw spending jump 0.5% in December, reversing November’s 0.2% decline. Residential building investment climbed 1.5% after showing no change the month before. New single-family home construction bounced back with a 1.5% spending increase, while multi-family housing projects – representing a smaller portion of the market – edged up 0.1%.
Home improvement and renovation spending continued its upward trend. However, homebuilding activity overall has remained weak due to elevated mortgage rates, increased costs for building materials stemming from import tariffs, and ongoing worker shortages in the construction industry.
Recent drops in mortgage rates may help stimulate future construction activity, though the availability of buildable lots continues to be limited. Housing investment has now fallen for four consecutive quarters.
Commercial and industrial construction spending fell 0.7% in December, including office buildings and manufacturing facilities. This sector has now seen eight straight quarters of decline, even as data center construction has surged to meet artificial intelligence technology demands.
Government construction projects dropped 0.5% following November’s 0.2% decrease. While state and local government construction spending declined 0.7% in December, federal construction projects increased 1.6%.
