Construction Spending Growth Slows in December

(Negative) The real value of construction put in place in December 2016 was $90,508 million, which was the lowest level since March 2016. However, compared with one year ago, this was an increase of 2.8 percent. The rate of growth in three of the last four months was quite weak. Therefore, the annual rate of growth continued to decelerate. It was 5.6 percent in November, which was the slowest rate of growth since December 2013.

Residential construction spending grew at a faster rate than total construction spending for the first time since August 2016. However, the last four months have had fairly weak growth. Therefore, the annual rate of growth, now 6.2 percent, decelerated to its slowest rate since November 2012.

The change in the real 10-year treasury rate, one of the best leading indicators for construction spending, has started moving in a negative direction for future construction spending.