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US: Construction Spending
| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 0.3% | 0.1% to 0.3% | 0.3% | -0.2% |
Highlights
The delayed December U.S. construction spending report showed that activity bouncing back to a modest level at the end of the year, offsetting the declines reported in the prior two months, but it continues to lag spending from the prior year.
U.S. construction spending rebounded as expected in December, rising 0.3 percent, matching expectations in the Econoday survey of forecasters. November saw a 0.2 percent drop, following October's 0.1 percent decline.
The estimated level of construction spending in December is 0.4 percent lower than December 2024.
Private construction spending in December rose 0.5 percent from November. Residential construction spending jumped 1.5 percent and non-residential shrank by 0.7 percent. Private construction spending contracted by 1.5 percent from December 2024.
Public construction spending was down 0.5 percent from November.
Market Consensus Before Announcement
A moderate 0.3 percent rise is the call for December.
* Originally scheduled for 2/2/2026
Definition
The dollar value of new construction activity on residential, non-residential, and public projects. Data are available in nominal and real (inflation-adjusted) dollars.
Description
Construction spending has a direct bearing on stocks, bonds and commodities because it is a part of the economy that is affected by interest rates, business cash flow and even federal fiscal policy. In a more specific sense, trends in the construction data carry valuable clues for the stocks of home builders and large-scale construction contractors. Commodity prices such as lumber are also very sensitive to housing industry trends.
Businesses only put money into the construction of new factories or offices when they are confident that demand is strong enough to justify the expansion. The same goes for individuals making the investment in a home.
A portion of construction spending is related to government projects such as education buildings as well a highways and streets. While investors are more concerned with private construction spending, the government projects put money in the hands of laborers who then have more money to spend on goods and services.
On a technical note, construction outlays for private residential, private nonresidential, and government are key inputs into three components of GDP--residential investment, nonresidential structures investment, and the structures portion of government expenditures.
That is why construction spending is a good indicator of the economy's momentum.
