Nonresidential construction spending rose 0.1% from December 2024 to January and is up 3.4% compared with January 2024, according to Associated Builders and Contractors.
For public construction, spending increased 0.2% for the month and is up 5.9% year to date. Private nonresidential spending was unchanged from December 2024 to January and is up 1.8% year to date. Spending was up for the month in 12 of the 16 nonresidential subcategories.
“Nonresidential construction spending rebounded slightly in January, yet this report is far from encouraging,” said ABC Chief Economist Anirban Basu. “Data center construction spending increased another 1.9% for the month, accounting for more than three-fourths of the monthly increase in nonresidential activity. While that segment is so hot that it can melt through the effects of high interest rates, many other categories appear to be frozen in place. Even manufacturing, which still accounts for nearly $1 in every $5 of nonresidential construction spending, is virtually unchanged since May of last year.
“Despite high interest rates and the looming effects of tariffs and heightened economic uncertainty, contractors remain optimistic,” Basu continued. “Nearly 65% of contractors expect their sales to increase during the first half of 2025, according to the January reading of ABC’s Construction Confidence Index. That said, it’s possible that the February reading of ABC’s CCI will show increased pessimism given declines in other economic confidence indicators.”
