Summary: Construction Starts the Year on the Right Foot
- Total construction spending rose 1.3% in January. Total spending is up 8.2% year-over-year.
- Upward revisions to the prior month’s data show that spending ended 2021 with more momentum than previously thought.
- January’s strong gain was broad-based. The residential and nonresidential categories both increased 1.3% during the month.
- The gain in residential spending was owed to solid increases in single-family and home improvement spending.
- The improvement in nonresidential spending was driven by robust gains in power and manufacturing project spending.
- Private spending increased 1.5% in January, while public spending rose 0.6%.
- Fast-rising building material prices likely tempered the overall gain in construction spending. The Producer Price Index (PPI) for inputs to construction industries (excluding capital investment, labor, and imports) leaped 3.0% during January.