Construction Spending Posts Strong Monthly and Year-Over-Year Advances in January 2016

Words: Dan KamysNearly All Private Segments Recorded Robust 12-Month Gains as Total Spending Reaches Seven-Year High; Favorable Weather Compared to January 2015 May Have Contributed to Outsized Jump in Highway Spending Construction spending soared in January from a month earlier and all major segments posted hefty year-over-year gains, pushing the total to the highest level since October 2008, according to an analysis by the Associated General Contractors of America. Association officials said the new spending figures indicate that demand for construction remains robust amid broader economic concerns. “There were solid gains for both the month and year in apartment, nonresidential and highway construction,” said Ken Simonson, the association's chief economist. “Although favorable weather may have boosted these results, demand for many types of projects remains strong despite worries that the overall economy has slowed.” Construction spending in January totaled $1.141 trillion at a seasonally adjusted annual rate, 1.5 percent higher than the upwardly revised December total and 10.4 percent higher than in January 2015, Simonson said. Private residential spending was flat for the month but increased 7.7 percent compared to January 2015. Spending on multifamily residential construction jumped 2.6 percent for the month and 30 percent year-over-year, while single-family spending dipped 0.2 percent from December but rose 6.6 percent compared to January 2015. Private nonresidential construction spending increased 1.0 percent for the month and 11.5 percent from a year earlier. Simonson observed that nearly every segment increased from 12 months before. The largest private nonresidential segment in January was manufacturing construction, which rose 4.2 percent for the month and 11.0 percent year-over-year. The next-largest segment, power (including oil and gas pipelines), gained 2.7 percent and 10.3 percent, respectively. Public construction spending increased 4.5 percent from a month before and 13.0 percent from 12 months earlier. The biggest public segment—highway and street construction—leaped 15 percent for the month and 34 percent year-over-year, as record warmth in January 2016 allowed projects to proceed that would normally have been deferred until spring in some regions, Simonson noted. Association officials said the new construction spending figures underscore the need to address growing construction workforce shortages that are making it difficult for many firms to add new staff. They called on elected and appointed officials to act on the measures outlined in the association’s workforce development plan (add hyper link), including making it easier for high schools to set up construction-specific education programs. “Growing demand for construction is only helpful if firms have enough workers to perform the work,” said Stephen E. Sandherr, the association’s chief executive officer. “Without a better pipeline for recruiting and preparing new workers, will have difficulty completing projects on time because they don’t have enough workers on staff.”
Source: The Associated General Contractors of Amerca, www.agc.org.
How I plan to live to 130
November 2026

While talking with one of our mechanics about the importance of changing the oil and keeping equipment greased, a thought occurred to me. These simple maintenance habits keep equipment running smoothly and help prevent breakdowns when you can least afford

Damian Lang
Contractor Tip of the Month
Read More
The Frustration Of Firefighting
November 2026

I find it fascinating what happens when an owner or executive leader walks into a struggling project. Morale picks up. Production improves. People communicate better. Meetings get sharper. Problems that have been sitting around for two weeks suddenly get

Corey Adams
Building More
Read More
Motivate With Money!
November 2026

I get asked about employee incentive and profit-sharing programs with every contractor I coach. Construction business owners seem to be looking for the magic bullet that will motivate their people to work harder and produce more. Some hope that providing

George Hedley
Business Building
Read More
Manufacturer Relationships
November 2026

As a contractor, the last person I wanted to see in my office was a salesman or a sales representative. Now that I better understand being a manufacturer, I see it in a different light. As a contractor, you can control the purchasing of material, understa

Steve Fechino
Fechino Files
Read More