Construction spending increases strongly in November

[WASHINGTON] US 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 per cent in November. Data for October was revised higher to show construction outlays accelerating 1.6 per cent instead of 1.3 per cent as previously reported.

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

Spending on private construction projects jumped 1.2 per cent, fuelled 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 per cent.

But outlays on non-residential construction like gas and oil well drilling fell 0.8 per cent 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 per cent in November.

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REUTERS