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AGC Report: Construction Spending Increased in December for the Month and Year

National – Construction spending increased in December compared to both November and a year ago due to growing demand for residential construction, according to an analysis of federal spending data released by the Associated General Contractors of America.

Construction spending in December totaled $1.64 trillion at a seasonally adjusted annual rate, 0.2% above the November rate and 9.0% higher than in December 2020. Full-year spending for 2021 increased 8.2% compared to 2020.

Private residential construction spending rose 0.7% in December from a month prior and 12.7% from December 2020. For 2021 as a whole, residential construction spending jumped 23.2% from 2020, with gains of 32.8% for single-family spending and 15.6% for multifamily spending.

Private nonresidential construction spending was nearly unchanged from November to December but increased 9.1% from December 2020. For all of 2021, private nonresidential spending slipped 2.3% from 2020. The largest private nonresidential segment, power construction, rose 0.1% for the month and 4.9% year-over-year. Among other large segments, commercial construction, comprising warehouse, retail, and farm structures, inched up 0.1% in December and jumped 18.4% year-over-year, driven by surging demand for distribution facilities. Manufacturing construction spending fell by 1.9% in December, after 11 consecutive months of growth, but posted a 30.4% gain above its year-earlier level.

Public construction declined 1.6% in December, with decreases in 11 of the 12 categories, and 2.9% year-over-year. For 2021 as a whole, public construction fell 4.2% from 2020. Highway and street construction increased 0.1% from November and rose 0.9% compared to December 2020. Educational construction slipped 1.4% for the month and skidded 8.5% year-over-year. Transportation construction spending fell 3.0% in December and 6.3% year-over year.