Commerce department in US has announced that during December of 2018 construction activity in the nation witnessed a sharp fall as investment in both private and public sector projects fell. According to data from the department construction expenditure declined by 0.6% in December even though Reuters had predicted that construction sector will increase by 0.2% during the period based on poll survey of economists. This report extended to weak data from varied sectors like retail sales, housing and home sales. Expenditure in construction sector increased year on year by 1.6% and in 2018 it rose by 4.1% signifying weakest growth since 2011.
The weak construction expenditure data during December could have a major impact on fourth quarter GDP estimate of the government. As per latest figures of the economy it grew at annualized rate of 2.6% between October-December representing slowdown from third quarter’s brisk growth rate of 3.4%. During December the expenditure on private construction fell by 0.6% though just a month before in November it was surging at 1.3%. The investment in private residential projects fell by 1.4% and housing market has been weighed down by high mortgage rates and expensive building materials.
Investment in residential projects contract by 0.2% during 2018 and expenditure on private structures that include industrial buildings gained by 0.4% during December after calling by 1.1% and expenditure in these structures contracted during third and fourth quarters. Public construction investments fell by 0.6% during December after calling by 1.0% in November. Expenditure on federal construction projects also fell by 2.2% and investment in both state and local federal government projects fell by 0.5% during December. This depicted a fall in eight months after fall of 1.1% in November the same year.