Construction spending shows a continuing split between residential and non-residential construction, according to the latest data from the US Census Bureau, with non-residential construction continuing to fall. Total construction spending rose by a seasonally-adjusted annual rate of 0.2 percent in December, failing to meet economist expectations of 0.5 percent growth. Total construction spending in December rose by 5.0 percent on a year-on-year basis.

Private residential construction continues to show strong growth, rising by 1.4 percent in December, or by 5.5 percent on a year-on-year basis. Low interest rates and a housing shortage likely will help maintain healthy residential construction during rest of this year.

Private non-residential construction fell by 1.8 percent in December, or by 0.1 percent on a year-on-year basis. All categories of private non-residential construction showed declines, mimicking the fall in non-residential fixed investment in the fourth quarter of 2019 reported last week.

Public construction also fell in December, declining by 0.4 percent at a seasonally-adjusted annual rate. On a year-on-year basis, public construction spending was up by 11.5 percent, reflecting higher growth in public construction in previous months of the year.

The fall in the monthly figure for private non-residential construction is particularly worrisome in that it indicates that there is still no revival showing up in data for non-residential fixed investment.