U.S. builders pushed construction spending up 0.7 per cent in December to a record high. It was the fifth consecutive monthly gain with all major sectors showing modest increases.
The December increase followed a 0.6 per cent rise in November, the Commerce Department reported Thursday. It closed out a year in which construction spending rose 3.8 per cent. It was the sixth consecutive annual increase. However, it was the weakest performance since a decline in 2011, a period when spending fell for five years as builders struggled to emerge from the housing bust and the Great Recession.
For December, spending on housing projects rose 0.5 per cent while nonresidential construction was up a stronger 1.1 per cent. Spending on government projects rose 0.3 per cent as strength at the federal level offset a drop in state and local construction.
For the year, spending totalled $1.23 trillion. The 3.8 per cent gain for the entire year followed increases of 11 per cent in 2014, 10.7 per cent in 2015 and 6.5 per cent in 2016.
Residential construction was up 10.6 per cent for all of 2017 while nonresidential building showed a slight 0.6 per cent increase. Spending on government projects fell 2.5 per cent, the second straight annual decline. Spending by state and local governments was down 2.7 per cent while spending by the federal government posted a small 0.3 per cent increase.
For December, the seasonally adjusted annual rate of $1.253 trillion was a record monthly number. Economists believe construction will support overall economic growth this year, helped by an acceleration in home building.