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(or read on for an excerpt from this month’s economic intel)
ECONOMY REMAINS OVERHEATED
Construction Spending Down to End 2022
The construction industry continues to face many of the same headwinds that buffeted it throughout 2022, including labor shortages, elevated material costs, and high and rising interest rates. While overall construction spending expanded throughout the year in both the U.S. (+7.7%) and Canada (+4.7%), spending dipped on a monthly basis in December, falling 0.4% and 6.3%, respectively.
The U.S. nonresidential sector contracted in December, ending a streak of six-straight monthly increases. The contraction was broad-based with spending declining in ten of the sixteen nonresidential subsectors.
Nonresidential constructions pending expanded in Canada, up a modest 0.2%. That’s due almost entirely to a 2.1% increase in industrial construction spending; spending fell in the institutional and government category and was flat in the commercial category in December.
The residential sector, on the other hand, has struggled as lofty interest rates push mortgage rates higher, severely limiting homebuying activity. As a result, residential construction spending declined 0.3% in the U.S. and 8.8% in Canada during December.
Click here to download this month’s full economic update
(which discusses: construction spending, labor shortages, material costs and interest rates.)