Economic news

Construction Spending Increases Strongly in November

WASHINGTON, Jan 4 (Reuters) - U.S. construction spending rose solidly in November, boosted by a robust housing market amid historically low mortgage rates.

The Commerce Department said on Monday that construction spending increased 0.9% in November. Data for October was revised higher to show construction outlays accelerating 1.6% instead of 1.3% as previously reported.

Economists polled by Reuters had forecast construction spending would rise 1.0% in November. Construction spending increased 3.8% on a year-on-year basis in November.

Spending on private construction projects jumped 1.2%, fueled by investment in homebuilding amid record-low mortgage rates and a pandemic-driven migration to suburbs and low-density areas. Spending on residential projects increased 2.7%.

But outlays on nonresidential construction like gas and oil well drilling fell 0.8% in November. The pandemic has depressed prices, leading to a contraction in spending on nonresidential structures in the third quarter. The fourth straight quarterly drop in spending on nonresidential structures bucked a rebound in overall business investment.

Spending on public construction projects eased 0.2% in November.

(Reporting by Lucia Mutikani Editing by Chizu Nomiyama)

Source: Reuters


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