Construction spending remained flat from October to November, according to a recent report by the Associated General Contractors of America. The stagnation in spending was attributed to declines in multifamily and office building construction, which offset gains in single-family homebuilding and data center projects. Despite this, contractors remain hopeful for 2025, as indicated by an upcoming survey from the association.
"Construction activity was closely balanced between segments that expanded or shrank in November," stated Ken Simonson, chief economist of the association. "But contractors appear to be optimistic about most categories heading into 2025."
The total spending stood at $2.15 trillion on a seasonally adjusted annual rate for November, unchanged from October's revised figure but up 3% compared to November 2023.
Private residential spending saw a slight increase of 0.1% for the month and grew by 3.1% year-over-year. Single-family homebuilding increased by 0.3% from October but showed a decrease of 0.7% from the previous year. Homeowners' expenditure on additions and renovations rose by 0.4% monthly and surged by 13.4% over the year, while multifamily construction decreased by 1.3% in November and dropped by 9.5% compared to last year.
In contrast, private nonresidential spending did not change from October but increased by 1.7% compared to last year. Notably, data center spending climbed by 2.7% monthly and soared by 43.1% annually; however, other private office constructions declined both monthly (1.8%) and yearly (17.1%).
Public construction experienced a slight dip of 0.1% for the month but increased overall by 4.6% over twelve months. Highway and street construction rose marginally (0.2%) for November yet fell annually (3.5%). Education construction slightly decreased for the month (0.2%) but grew annually (3%), while transportation spending fell in November (0.5%) but increased significantly over the year (6.6%).
Association officials anticipate their upcoming AGC of America/Sage Construction Hiring & Business Outlook will reflect contractor optimism about demand throughout various market segments despite workforce challenges and tariff issues.
"Contractors have pretty clear expectations for the opportunities, and challenges they will face this year," said Jeffrey D Shoaf, CEO of the association." Their predictions for the year provide us with an important tool for shaping our advocacy and education efforts."