Nonresidential Construction Spending Declines 0.2% in December

National nonresidential construction spending fell 0.2% in December 2024, according to an analysis by Associated Builders and Contractors of data released recently by the U.S. Census Bureau.

On a seasonally adjusted annualized basis, total nonresidential spending reached $1.241 trillion.

Spending declined in nine of the 16 nonresidential subcategories on a monthly basis.

Private nonresidential construction spending inched up 0.1%, while public nonresidential spending dropped 0.5%.

“Public sector nonresidential spending fell sharply in the last month of 2024, but that decline was likely a short-term phenomenon as the transition between presidential administrations and cold weather delayed construction work,” ABC Chief Economist Anirban Basu said.

“While public sector activity should at least partially rebound in the coming months, high interest rates and an emerging trade war with Canada and Mexico will continue to weigh on many privately financed segments.”

Basu noted that growth in private-sector nonresidential construction remains highly concentrated

“What little private sector nonresidential momentum exists remains concentrated in just two segments,” Basu said.

“Data centers, which are part of the office category, and manufacturing accounted for 94% of the increase in total nonresidential construction spending from December 2023 to December 2024. Activity in these segments, and perhaps only these segments, will remain elevated regardless of upward pressure on construction costs,” he added.