Construction Spending Increases in November
Construction spending is on the rise as data for 2019 continues to flow in the new year. According to the Census Bureau, spending reached a seasonally adjusted annual rate of $1.324 trillion in November 2019, up 0.6% from the previous month. This is also more than 4% higher than November 2018, and it's the best November showing on record, dating back to 2002. Reuters reported economists predicted an overall spending gain of 0.3% in November.
Despite the positives, spending year-to-date is down almost a full percent, states Wells Fargo Securities. "The five-month string of consecutive gains is mostly owed to residential, which rose 1.8% during the month," according to its monthly report on construction spending. Private residential spending is 2.7% above November 2018, and is at its highest since September 2018.
Nonresidential private construction spending saw a modest decline of 1.2% in November; however, it is still slight outpacing its year-to-year reading. Residential and nonresidential spending has been a bright spot for public construction—as far as year-over-year numbers are concerned. Public residential spending slipped similar to nonresidential private construction, but it's 14.7% above November 2018. Total nonresidential has skyrocketed more than 12% from November 2018 but is only up less than a percent from month to month.
-Michael Miller, managing editor