US Construction Spending Seen at Ten-Year High

Construction spending in US reached a 10-year high in November, with growth in the private and public sectors both for the month and year-on-year.

The outlook for 2017 appears favorable overall, according to analysis of the data by the Associated General Contractors of America. However, association officials warned that demand will vary for different types of construction projects, Construction Index reported.

“These numbers confirm what contractors have been reporting that there was no let-up in demand last year,” said Ken Simonson, the association’s chief economist. “Most contractors expect to remain busy in 2017, as well, although there will be a shift in the types of projects that are most active. Office construction is especially hot, while manufacturing and apartment construction are slowing sharply, and public investment is a major question mark.”

Construction spending in November totaled $1.182 trillion at a seasonally adjusted annual rate, the highest total since April 2006, Simonson said. He added that the November rate was up 0.9% from the month before and up 4.1% from the November 2015 level.

Private residential construction spending increased by 1% between October and November and rose 3% over the past 12 months. Spending on multi-family residential construction slipped 2.7% for the month but was 11% higher than in November 2015, while single-family spending climbed 1.8% for the month but dipped 0.9% from a year earlier.

Private non-residential construction spending grew by 0.9% for the month and 6.4% year-over-year. The largest private non-residential segment in November was power construction (including oil and gas pipelines), which gained 0.5% for the month and 1.5% over 12 months.