Construction spending was unchanged from October to November as a continued downturn in multifamily and office building construction offset growing demand for single-family houses and data centers, according to a recent analysis of a new government by the Associated General Contractors of America.
Association officials said that despite the stalled spending levels contractors remain optimistic about 2025, based on a new association survey.
“Construction activity was closely balanced between segments that expanded or shrank in November,” Ken Simonson, the association’s chief economist, said in a news release. “But contractors appear to be optimistic about most categories heading into 2025.”
Spending totaled $2.15 trillion at a seasonally adjusted annual rate in November. That figure was unchanged from the downwardly revised October rate and 3% above the November 2023 level.
Private residential spending inched up 0.1% for the month and rose 3.1% from November 2023. Single-family homebuilding rose 0.3% from October but slipped 0.7% year-over-year. Spending by homeowners on additions and renovations rose 0.4% for the month and 13.4% year-over-year. But multifamily construction fell 1.3% in November and 9.5% from a year earlier.
Private nonresidential spending was unchanged from October and up 1.7% year-over-year. Spending on data centers, which the Census Bureau includes in office construction, jumped 2.7% for the month and 43.1% from a year earlier. But private office construction other than data centers tumbled 1.8% in November and 17.1% year-over-year.
Public construction spending declined 0.1% for the month but rose 4.6% over 12 months. Among the three largest segments, highway and street construction rose 0.2% in November but fell 3.5% year-over-year, education construction fell 0.2% for the month but rose 3.0% year-over-year, and transportation spending declined 0.5% in November but increased 6.6% from a year earlier.
“Contractors have pretty clear expectations for the opportunities, and challenges, they will face this year,” AGC CEO Jeffrey D. Shoaf said. “Their predictions for the year provide us with an important tool for shaping our advocacy and education efforts.”