Key Takeaways

• National nonresidential construction spending decreased 0.1% in November.
• On a seasonally adjusted annualized basis, nonresidential spending totaled $1.234 trillion for the month and is up year-over-year.
• "Construction activity was closely balanced between segments that expanded or shrank in November. But contractors appear to be optimistic about most categories heading into 2025."

Press Release from Associated Builders and Contractors: ABC: Nonresidential Construction Spending Dips 0.1% in November, Flat Year Over Year

WASHINGTON, Jan. 2—National nonresidential construction spending declined 0.1% in November, 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 $1.234 trillion. On a year-over-year basis, nonresidential construction spending is up 2.8%, approximately flat in inflation-adjusted terms.

Spending was down on a monthly basis in 8 of the 16 nonresidential subcategories. Private nonresidential spending was unchanged, while public nonresidential construction spending was down 0.2% in November.

“Contractor confidence surged post-election,” said ABC Chief Economist Anirban Basu. “Many contractors expect a combination of deregulation and tax cuts to support greater activity and profitability going forward, including substantial investment in traditional energy sectors and manufacturing. Still, there are reasons for concern.

“Nonresidential construction spending momentum has all but disappeared, despite an ongoing boom in data center construction (up 43% year over year), largely because project financing costs remain elevated,” said Basu. “With inflation remaining stubbornly high and potentially accelerating going forward, interest rates stand to stay higher for longer. Prospective tariff increases threaten to push construction materials prices higher, and shifting immigration policies could expand future worker shortages. Only time will tell whether the recent upswing in optimism will prove justified.”

Press Release from Associated General Contractors of America: Construction Spending Stalls In November As Slumping Multifamily And Office Investments Offset Growth In Homebuilding And Data Centers

Total Spending Remains Unchanged from October at $2.15 Trillion Seasonally Adjusted Annual Rate as the Associated General Contractors of America and Sage Prepare to Release the 2025 Industry Outlook

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 an analysis of a new government report that the Associated General Contractors of America released today. Association officials said that despite the stalled spending levels contractors remain optimistic about 2025, based on a survey the association will release next Wednesday.

“Construction activity was closely balanced between segments that expanded or shrank in November,” said Ken Simonson, the association’s chief economist. “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 3.0 percent above the November 2023 level.

Private residential spending inched up 0.1 percent for the month and rose 3.1 percent from November 2023. Single-family homebuilding rose 0.3 percent from October but slipped 0.7 percent year-over-year. Spending by homeowners on additions and renovations rose 0.4 percent for the month and 13.4 percent year-over-year. But multifamily construction fell 1.3 percent in November and 9.5 percent from a year earlier.

Private nonresidential spending was unchanged from October and up 1.7 percent year-over-year. Spending on data centers, which the Census Bureau includes in office construction, jumped 2.7 percent for the month and 43.1 percent from a year earlier. But private office construction other than data centers tumbled 1.8 percent in November and 17.1 percent year-over-year.

Public construction spending declined 0.1 percent for the month but rose 4.6 percent over 12 months. Among the three largest segments, highway and street construction rose 0.2 percent in November but fell 3.5 percent year-over-year, education construction fell 0.2 percent for the month but rose 3.0 percent year-over-year, and transportation spending declined 0.5 percent in November but increased 6.6 percent from a year earlier.

Association officials noted that the upcoming AGC of America/Sage 2025 Construction Hiring & Business Outlook will show contractors remain optimistic about overall demand for construction in 2025. But that same survey will also highlight how contractors are preparing to meet demand for different market segments this year even as they cope with new workforce and tariff challenges and adopt new technologies.

“Contractors have pretty clear expectations for the opportunities, and challenges, they will face this year,” said Jeffrey D. Shoaf, the association’s chief executive officer. “Their predictions for the year provide us with an important tool for shaping our advocacy and education efforts.”