U.S. builders boosted spending on construction projects for a second straight month in November, pushing activity to the highest level in more than a decade.
Construction spending rose 0.9 per cent in November after a 0.6 per cent increase in October, the Commerce Department reported Tuesday. The increase reflected solid gains in home construction, nonresidential building and government construction activity.
The gains in all three categories pushed total construction to a seasonally adjusted annual rate of $1.18 trillion, the highest point since April 2006 when a housing boom fueled building.
Economists believe construction will continue to show gains in 2017, reflecting a strong job market with unemployment at the lowest point in nine years.
Financial markets sent stock prices to record highs following the election of Donald Trump, reflecting in part enthusiasm over his vows to increase spending on projects to repair and replace the country’s aging infrastructure.
For November, the 1 per cent rise in residential construction reflected a 1.8 per cent rise in single-family construction which offset a 2.7 per cent drop in the smaller and more volatile apartment construction sector.
The 1 per cent rise in nonresidential construction followed a 1.6 per cent decline in October. The gains in November were led by 7 per cent jump in hotel and motel construction.
The 0.8 per cent advance in government projects reflected a 3.1 per cent rise in spending at the federal level and a 0.6 per cent increase in construction by state and local governments.
President Barack Obama sought for a number of years to get Congress to approve higher infrastructure spending, but he was blocked by opposition from Republicans who complained that the projects would increase budget deficits. Democrats in Congress have already expressed support for Trump’s proposals to boost construction spending. His ideas, however, may still face opposition from Republicans worried about high deficits.