CONSTRUCTION OUTLAYS SOAR IN JANUARY TO $1.369 TRILLION WITH LARGE PUBLIC WORKS AND RESIDENTIAL GAINS, MODEST PRIVATE NONRESIDENTIAL GROWTH Mild Weather in Many Parts of the Country May Have Boosted Monthly Results; Construction Officials Caution that the Coronavirus May Impact Deliveries of Materials Manufactured in Hard-Hit Countries

CONSTRUCTION OUTLAYS SOAR IN JANUARY TO $1.369 TRILLION WITH LARGE PUBLIC
WORKS AND RESIDENTIAL GAINS, MODEST PRIVATE NONRESIDENTIAL GROWTH
Mild Weather in Many Parts of the Country May Have Boosted Monthly Results; Construction Officials
Caution that the Coronavirus May Impact Deliveries of Materials Manufactured in Hard-Hit Countries
Construction spending in January increased 1.8 percent to $1.369 trillion from December and 6.8 percent from
January 2019 as all major segments logged gains, according to a new analysis of federal data released today by
the Associated General Contractors of America. Association officials cautioned that January results may have
been boosted by unusually mild winter weather in much of the nation and that spending in future months could be
impacted by uncertainty related to the coronavirus and its potential impacts on the supply chain for construction
materials.
“Public spending on infrastructure, along with single-family housing, was exceptionally robust in January,” said
Ken Simonson, the association’s chief economist. “While overall economic conditions remain favorable, future
construction spending levels may be affected by the growing uncertainties related to the coronavirus and its
impact on the supply chain for construction components, especially those manufactured in hard-hit countries.”
Simonson noted that many construction materials, machines and parts are sourced, at least in part, from China and
other countries where production and transportation have been disrupted by the virus. He added that, to date, no
contractors have reported supply problems that are impacting their projects.
Public construction spending jumped 2.6 percent from December and 12.6 percent from a year earlier. The largest
public category, highway and street construction, increased 11.7 percent. Educational construction, the next-
largest segment, rose 4.1 percent year-over-year. Public spending on transportation infrastructure—airports,
transit, rail and ports—climbed 11.5 percent. Other infrastructure categories posted even larger year-over-year
gains: 13.9 percent for sewage and waste disposal, 35.5 percent for water supply and 23.8 percent for
conservation and development.
Private residential spending increased 2.1 percent for the month, led by a 2.8 percent increase in single-family
homebuilding. Multifamily construction remained flat. Private nonresidential spending increased 0.8 percent for
the month and 0.5 percent compared to January 2019. Among the largest private nonresidential segments, power
construction (electric power plus oil and gas field and pipeline projects) gained 5.7 percent year-over-year;
commercial construction (retail, warehouse and farm structures) declined 5.5 percent; manufacturing construction
increased 5.0 percent; and office construction rose 0.4 percent.
Association officials said the new spending data highlights the overall strength of the U.S. economy. But they
cautioned that ongoing workforce shortages and the coronavirus’ impact on construction supply chains and the
broader economy could undermine short-term demand for construction services. They urged public officials to
continue boosting investments in infrastructure and other public works to offset any temporary dip in demand
caused by the uncertainties related to the virus.
“Demand for construction is benefitting from the strength of the overall economy and robust public-sector
investments in many types of construction projects,” said Stephen E. Sandherr, the association’s chief executive
officer. “The best way to keep the economy healthy and stave off any short-term impacts the coronavirus may
have is for public officials to continue investing in needed infrastructure and other public works projects.”

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