U.S. construction spending declined 0.6% in December, signaling a slowdown in economic momentum at the end of 2018, according to government data released Monday. The drop followed an unexpected 0.8% increase in November and contrasted with economists' forecasts of a 0.2% rise.
The Commerce Department reported the decline as part of broader weak December economic indicators, including retail sales and housing data. Annual construction spending grew 1.6% in December but posted its weakest year-over-year gain since 2011, rising 4.1% for the full year.
The report's delayed release—pushed by a five-week government shutdown ending in January—added uncertainty to fourth-quarter GDP estimates. The economy expanded at a 2.6% annualized rate in October-December, down from 3.4% in the third quarter.
Private construction investment fell 0.6% in December, with residential projects tumbling 1.4% after a November rebound. Persistent challenges like high mortgage rates, rising material costs, and labor shortages contributed to a 0.2% annual contraction in housing investment.
Nonresidential construction saw mixed results, with manufacturing and power plant projects rising 0.4% but declining in the final two quarters of 2018. Public construction spending dropped 0.6% to an eight-month low, driven by a 2.2% plunge in federal projects and a 0.5% decline in state and local investments.
