U.S. Construction Spending Hits 10-Year High

Washington, Rabi’II 5, 1438, Jan 3, 2017, SPA — U.S. construction spending rose more than expected in November, reaching its highest level in more than 10 years, the government reported Tuesday, possibly signaling higher fourth-quarter economic growth.
The Commerce Department said construction spending rose 0.9 percent in November after a 0.6 percent increase the previous month. Spending was up 4.1 percent from a year earlier.
The November improvement reflected solid advances in home construction, non-residential building, and government construction activity. The gains in all three categories pushed total construction spending to an annual rate of $1.18 trillion, the highest level since April 2006, near the peak of a housing boom.
The better-than-expected November gain and October’s upwardly-revised spending figure could prompt economists to lift their gross domestic product (GDP) estimates for the fourth quarter of 2016. Economists believe construction will continue to show gains in 2017, reflecting a strong labor market with unemployment at a nine-year low.
In the November report, spending on private-sector construction projects jumped 1 percent to its highest level since July 2006, as single-family homebuilding, as well as home renovations, increased.
Investment in private non-residential structures—including factories, hospitals, and roads—rose 0.9 percent in November after dropping 1.5 percent the previous month.
Public-sector construction spending increased 0.8 percent in November, rising for the fourth consecutive month to its highest level since last March. Spending on state and local government projects rose 0.6 percent, also gaining for a fourth consecutive month. Spending on federal government construction jumped 3.1 percent after rising 0.2 percent in October.
–SPA
19:00 LOCAL TIME 16:00 GMT