Fourth Quarter Construction Economics: The Good, The Bad, and the Ugly
Anirban Basu, Chief Construction Economist, Marcum LLP
Issue 30 – Fourth Quarter 2019
The Marcum Commercial Construction Index for the fourth quarter of 2019 reports healthy levels of construction spending in large part due to the ongoing strength in infrastructure-related categories. Nonresidential construction spending stood at an annualized rate of $779.6 billion in December 2019, down 1.2 percent from the previous month but up 4.4 percent year-over-year.
Construction contractors remained busy through the fourth quarter of 2019. While nonresidential construction spending increased 4.4 percent on a year-over-year basis in December–despite inching lower on a monthly basis–much of the industry’s strength comes from public construction segments, including water supply (+33.6%), conservation and development (+16.9%), and highway and street (+14.1%).
Private nonresidential construction spending remains stagnant according to the latest data released by the U.S. Census Bureau. On a year-over-year basis, private nonresidential construction spending has remained virtually unchanged at $450 billion on an annualized basis.
According to the latest data released from the Bureau of Economic Analysis, real GDP expanded 2.3 percent in 2019. While positive, it was less than the 2.9 percent growth the economy posted in 2018.