Construction spending falls 0.6%

Even after December retreat, ’18 noted as record-setting

WASHINGTON — U.S. construction spending edged down 0.6 percent in December, with declines in residential construction and government projects. Even with the December setback, construction spending for 2018 reached record levels, though it was the smallest increase in seven years.

The December decline followed a 0.8 percent rise in November, the Commerce Department reported Monday. Residential construction spending fell by 1.4 percent, highlighting the ongoing struggles in the housing sector. Nonresidential activity rose 0.4 percent. Spending on government projects fell 0.6 percent, with federal, state and local activity falling.

For the year, construction spending rose 4.1 percent to $1.3 trillion, which was a record high. But the 4.1 percent gain was the weakest performance since spending fell 2.6 percent in 2011. Within the sector, spending on singlefamily home construction was up 5.2 percent while multifamily housing rose 0.7 percent.

Other areas of weakness in construction spending for 2018 included private manufacturing, which fell 1.7 percent.

Construction spending reached $1.16 trillion in 2006, the peak of a housing boom that would begin declining in 2007, helping to trigger a deep recession and five-year retreat in spending.

Beginning in 2012, construction activity started rising again, and in 2016 it sur-

passed the 2006 high. After double-digit gains of 11 percent in 2014 and 10.7 percent in 2015, spending increases have slowed in the past three years.

The drop in residential activity

in December reflected a 3.2 percent fall in spending on single-family construction that was partially offset by a 3.1 percent rise in spending on apartments.

The 0.4 percent increase in nonresidential construction spending reflected a solid 1 percent gain in hotels and motels, but a flat

reading for offices and a 1 percent drop in the category that includes shopping centers.

The 0.6 percent fall in the public-construction category reflected a sharp 2.2 percent drop in spending by the federal government and a 0.5 percent fall in construction spending at the state and local

levels.

The December construction-spending report was one of a number of government reports delayed because of the 35-day partial government shutdown.

AP A construction worker carries boards for an already-sold home under construction in north Dallas in February. U.S. construction spending dropped 0.6 percent in December.