Nonresidential Construction Spending Dips in December
Key Highlights
-
December nonresidential construction spending down 0.6%, totaling $1.24 trillion annualized
-
Private projects led declines with a 0.7% drop; public spending down 0.4%
-
12 of 16 subcategories saw reduced activity, signaling broad sector slowdown
WASHINGTON, DC — Nonresidential construction spending pulled back in December, dropping 0.6% from the previous month, according to an Associated Builders and Contractors (ABC) analysis of US Census Bureau data. On a seasonally adjusted annualized basis, total nonresidential spending reached $1.24 trillion.
Twelve of the 16 nonresidential subcategories posted lower spending in December. Private construction activity led the monthly decline with a 0.7% drop, while public sector projects fell 0.4%.
Implications for Contractors
The slowdown reflects tightening budgets and shifting project timelines. Contractors may see impacts on scheduling and procurement, particularly in private-sector work, where reductions were most pronounced.
“Nonresidential construction spending contracted sharply in December,” said ABC Chief Economist Anirban Basu. “This decline was concentrated in the manufacturing segment, which is now down nearly 16% from the August 2024 all-time high. Given trade policy uncertainty and the waning effects of the CHIPS Act, manufacturing-related spending will likely continue to decline over the next several quarters.
“While manufacturing is the most significant driver of nonresidential weakness, it’s far from the only one,” said Basu. “Eight of the 11 private nonresidential subsegments contracted in December, and total private nonresidential spending is now down 1.8% year over year. Given this weakness, it is unsurprising that ABC’s Construction Backlog Indicator fell to a four-year low in January.”
Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.