WASHINGTON – Construction spending nationwide edged up in November for the second time in seven months, as increased spending on schools, power plants and factories helped offset a continued decline in residential construction, according to a report today from the U.S. Census Bureau.
Spending rose 0.1 percent compared with October, to a seasonally adjusted annual rate of $1.165 trillion per year. The increase followed a revised October decline of 0.4 percent that was only half as sharp as initially reported, and a September increase of 0.3 percent. Compared with the November 2006, however, total construction spending fell 0.1 percent.
Analysts had expected a month-over-month decline of 0.4 percent, based on the median forecast from a Bloomberg News survey of 47 economists. (Their estimates ranged from a drop of 1 percent to an increase of 0.5 percent.)
Private residential construction fell 2.5 percent compared with October, accelerating from the previous month’s 2.3-percent drop, in what Bloomberg analysts said was the 21st consecutive month-over-month decline – and the steepest since 2002. Compared with the same month a year ago, residential construction plunged 18 percent.
Total public and private spending on nonresidential construction increased 2.1 percent from its October level and surged to 18 percent above its level in November 2006. Private spending on nonresidential construction rose 1.7 percent compared with October, while public construction spending increased 2.5 percent.
“The report was troubling because there were signs of a deepening retrenchment in outlays for single-family homes,” Omair Sharif, an economist at RBS Greenwich Capital in Greenwich, Conn., told Bloomberg News. “Builders will likely continue to scale back on groundbreaking activity in the coming months, making the outlook for spending on single-family homes abysmal.”
Additional information, including the full November construction spending report, is available from the U.S. Commerce Department’s Bureau of the Census, Manufacturing and Construction Division, at www.census.gov.
