U.S. construction spending in November increased by more than expected, according to figures released Tuesday by the Commerce Department.
Overall construction spending came in at a seasonally adjusted annual rate of $807.1 billion in November, a 1.2 percent increase from revised October figures. The growth was significantly stronger than the 0.5 percent increase forecast by most economists.
However, revised figures for October, which had initially shown a 0.8 percent increase in construction spending, were revised to show a 0.2 percent decrease.
Private construction spending increased by 1 percent, driven largely by a 2 percent increase in spending on residential construction. Private non-residential construction spending held nearly flat after falling 0.6 percent in October.
Spending on public construction increased by 1.7 percent, with a 1.3 percent increase in state and local construction spending supplemented by a 5.3 percent increase in federal construction spending.
Of the public construction, educational construction spending was up 0.5 percent in November, while highway construction spending was up 1.9 percent.
Compared to the same month a year ago, overall construction spending was up by 0.5 percent in November, with a 4.0 percent increase in spending on private construction more than offsetting a 5.3 percent drop in spending on public construction.
Robert Kavcic, an economist with BMO Capital Markets, said, "Overall construction spending is about flat versus year-ago levels, but a notable divide has opened up between growth in the private and public sectors."
"Note that 2012 should mark the first year since 2005 that both private residential and nonresidential construction add to U.S. real GDP growth," he added.
For comments and feedback: editorial@rttnews.com