For the first time since 2011, total construction spending in the U.S. suffered an annual decline in 2019. After an increase of 3.3 percent in 2018, total outlays for construction projects slipped by 0.3 percent last year. This is according to data recently released by the Census Bureau in the Monthly Construction Spending report.
Now I will admit that -0.3 percent for an entire year is not much of a decrease. In fact, it is within the margin for error for this data set, and there is a chance it will be revised upward in the coming months. If the revisions go enough in our favor, we may get to flat for the year.
So for now, let's just call last year flat-to-down. That isn't terrible, but we should be doing better. Interest rates are at historically low levels, and they are barely higher than the rate of inflation. The overall economy grew by 2 percent while the population grew by at least a half-percent. As a nation, we produced and then burned more energy, used more water, made more cellular connections, traveled more miles and employed more people than at almost any other time in history.
Yet we still managed to spend no more money building things in 2019 than we did the year before. For now, I am going to call this a statistical anomaly. But if the construction sector continues to consistently underperform the overall economy, then it will require much closer scrutiny by the processors who manufacture construction materials and supplies.
One reason for thinking this is an anomalous problem—that already may be in the past—shows up on the top chart for total spending. A close inspection of the trend in the graph reveals that most of the decline in total spending in 2019 occurred in the first half of the year. By the end of the year, the trend was noticeably stronger.