Construction spending in the U.S. unexpectedly increased in November, boosted by a jump in spending on manufacturing facilities, data from the Census Bureau showed Tuesday.
Total spending on construction during November is estimated to have been at a seasonally adjusted annual rate of $1.807.5 billion, 0.2 percent above the pace recorded in October. Economists had forecast that construction spending would decline by 0.4 percent.
The gain was highly unexpected. None of the economists surveyed by Econoday foresaw a month-to-month increase. Forecasts ranged from a 0.3 percent decline to a 0.5 percent decline.
The prior month’s figure was revised to show just a 0.2 percent decline in October from September, an improvement from the 0.3 percent initially reported.
Private sector construction spending rose 0.3 percent, led by a 6.5 percent gain in manufacturing construction from a rate of $117.5 billion to $125.1 billion. For the third month in a row, manufacturing was the largest sector for nonresidential construction spending.
Spending on power projects rose 1.2 percent to an annual rate of $96.7 billion. Spending on hotels and motels rose to a rate of $19.8 billion, a 0.2 percent increase. Healthcare construction spending ticked up 0.1 percent to $42.5 billion. Construction spending for private education facilities rose 0.6 percent to a rate of $19.3 billion.
Construction spending for commercial buildings was flat for the month at a rate of $116.5 billion. Office construction spending declined 0.1 percent to a rate of $75.2 billion, the first monthly decline in at least four months.
Private residential spending on single-family homes continues to drop precipitously. In November, this fell to a rate of $868 billion, down 2.9 percent from the prior month. This is the fourth consecutive month of declines. Compared with a year ago, spending on single family homes is down 10.2 percent.
Multifamily construction rose 2.4 percent to a rate of $110.2 billion. This is up 10.7 percent from a year ago.
Government spending fell 0.1 percent, with declines in both residential and nonresidential spending. Spending on highways and streets, the largest category of public construction spending, fell one percent.
Private sector spending on construction for religious organizations jumped 4.1 percent to $2.9 billion. This is up 0.3 percent from a year ago.
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