Construction spending in December totaled $1.64 trillion at a seasonally adjusted annual rate, 0.2 percent above the November rate and 9.0 percent higher than in December 2020, according to an analysis of federal spending data by the Associated General Contractors of America. Construction spending in all of 2021 increased 8.2 percent compared with 2020.
The December increase was due to growing demand in residential construction amid flat spending on private nonresidential construction and a decrease in public sector construction.
“Demand for new housing remains strong, while demand for nonresidential projects has been variable and most types of public sector investments in construction are declining,” said Ken Simonson, the association’s chief economist. “Contractors coping with rising materials prices and labor shortages are also dealing with the consequences of a nonresidential market that is, at best, uneven.”
Private residential construction spending rose 0.7 percent in December from a month prior and 12.7 percent from December 2020. For 2021 as a whole, residential construction spending increased 23.2 percent from 2020, with gains of 32.8 percent for single-family spending and 15.6 percent for multifamily spending.
