Nonresidential Construction Spending Plunges in December, Says ABC

National nonresidential construction spending decreased 0.6% in December, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.24 trillion.

Spending was down on a monthly basis in 12 of the 16 nonresidential subcategories. Private nonresidential spending was down 0.7%, while public nonresidential construction spending was down 0.4% in December.

“Nonresidential construction spending contracted sharply in December,” said ABC Chief Economist Anirban Basu. “This decline was concentrated in the manufacturing segment, which is now down nearly 16% from the August 2024 all-time high. Given trade policy uncertainty and the waning effects of the CHIPS Act, manufacturing-related spending will likely continue to decline over the next several quarters.

“While manufacturing is the most significant driver of nonresidential weakness, it’s far from the only one,” said Basu. “Eight of the 11 private nonresidential subsegments contracted in December, and total private nonresidential spending is now down 1.8% year over year. Given this weakness, it is unsurprising that ABC’s Construction Backlog Indicator fell to a four-year low in January.”