The Home Buyer's Korner

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February 3rd, 2015

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Construction Spending for December 2014

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Construction spending rose less than expected with an increase of 0.4 percent in December or at a rate of $355 billion. That figure is down 3.9 percent from the previous year.

Private outlays barely rose with declines in investment. Construction spending edged up 0.1 percent, with outlays for power projects falling 1.0 percent and spending on transportation dropping 1.4 percent. Outlays on residential projects rose 0.3 percent. Residential spending was lifted by gains in both single- and multi-family homes as well as renovations. Spending on public construction projects increased 1.1 percent in December. Economists had forecast construction spending rising 0.7 percent in December.

November’s construction outlays were revised up to show a 0.2 percent decline instead of the previously reported 0.3 percent fall.

2014 ended on a positive note at a seasonally adjusted annual rate of $982 billion, according to preliminary estimates from the Commerce Department. For all of 2014, construction spending increased 5.6 percent. The government reported on Friday that the economy grew at a 2.6 percent annual pace in the fourth quarter, slowing from the third-quarter’s 5.0 percent rate.

Total spending is up 2.2 percent over December 2013. Government spending increased 1.1 percent during the month to $283.5 billion, to finish at a 6.7-percent year-over-year increase.

Both public residential and nonresidential projects saw increases during December, up 2.3 percent and 1.1 percent, respectively. Spending on public housing projects was up 3.2 percent year-over-year, while nonresidential finished at a 6.8-percent year-over-year gain.

Homebuilding increased 0.3 percent to $349.5 billion, but finished the year down 4 percent from 2013. Spending on single family homes rose 1.2 percent during the month to $202.4 billion while apartment spending rose 0.4 percent to a rate of $46.5 billion.

Single-family homes finished the year up 11 percent year-over-year, while apartments finished up at a 26.8-percent increase. Private non-residential fell 0.2 percent during the month to a rate of $349 billion, but remained up 5.3 percent on the year.

The biggest private non-residential gains came from amusement and recreation, up 2.8 percent to $8.5 billion; communication, up 2.5 percent to $15.6 billion; and manufacturing, up 1.9 percent to $60.3 billion.

Public non-residential saw the biggest percent gains coming in at 18.2 percent or $11.7 billion and office at 9.1 percent or $8.5 billion. Highway and street spending rose 2.1 percent during December to a rate of $90.2 billion. Private construction spending rose 0.1 percent during December to a rate of $698.5 billion, up 0.4 percent on the year. Overall nonresidential spending was up 0.4 percent to $627 billion, up 5.9 percent year-over-year.

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