Private Residential Construction Spending Ends 2020 Up
Originally published by: NAHB — January 1, 2021
The following article was produced and published by the source linked to above, who is solely responsible for its content. SBC Magazine is publishing this story to raise awareness of information publicly available online and does not verify the accuracy of the author’s claims. As a consequence, SBC cannot vouch for the validity of any facts, claims or opinions made in the article.
NAHB analysis of Census Construction Spending data shows that total private residential construction spending rose 3.1% in December 2020 to a seasonally adjusted annual rate of $691.0 billion. Total private residential construction spending was 20.7% higher than a year ago.
The monthly gains are largely attributed to the strong growth of spending on single-family and improvements. Single-family construction spending rose to a $365.0 billion annual pace in December, up by 5.8%. It was 20.7% up from December 2020. This is in line with the strong readings of single-family housing starts. Remodeling spending, which include spending on remodeling, major replacements, and additions to owner-occupied housing units, inched up by 0.4% in December. Meanwhile, multifamily construction spending inched up 0.1%, reaching a new record high. It was 17.8% higher since a year ago.
The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the solid growth in single-family construction and home improvement from the second half of 2019 to February 2020, before the COVID-19 hit the U.S. economy, and the quick rebounds since July 2020. New multifamily construction spending has picked up the pace after a slowdown from the second half of 2019.
Private nonresidential construction spending decreased 1.7% to a seasonally adjusted annual rate of $446.6 billion. And it was 9.8% lower than a year ago. The largest contribution to this month-over-month nonresidential spending decrease was made by the class of manufacturing ($3.8 billion), followed by commercial ($2.2 billion), and lodging ($1.6 billion).