Total 2015 Construction Spending Highest In Eight Years
According to the latest Commerce Department data, construction spending rose 0.1 percent in December on increased home construction and government project spending. Economists, however, had expected a 0.6 percent increase, Reuters reported. The small increase in December and the downward revised November figure could prompt a downward revision of GDP for the fourth quarter. The AP reported that construction spending “rebounded slightly in December, helping push total spending for 2015 to the highest level in eight years.” For the 12 month period, construction spending came in at $1.1 trillion, and 10.5 percent increase and the most since 2007. For December, home construction “advanced 0.9 percent, while non-residential construction fell 2.1 percent,” and spending “on state and local government projects was up 2.3 percent, but spending on federal building projects fell 3.3 percent.” Forbes reported that the “bulk of last year’s expenditures jump came via the private sector, which accounts for more than 70% of all construction spending. In 2015 the value of private construction was $806.1 billion, 12.3% above the $717.7 billion spent in 2014.”
What This Means For Small Businesses
The uneven growth of the US economy continues to be a source of frustration for businesses large and small, as it leads to continued uncertainty about future growth. Though the latest construction spending data suggests there could be some positive momentum in the construction sector, small businesses are likely to remain wary about future projects. As NFIB Chief Economist William Dunkelberg said in the latest Small Business Economic Trends report, “The net percent of owners planning to add to inventory was unchanged at a net 0 percent for the third month in a row. With weak expectations for sales and business conditions, owners see no need to add to current stocks.”
Additional Reading
The New York Times also covered the story.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
