Construction Spending a Sign of Recovery

Right out of the new year’s gate we get a better-than-expected report: U.S. construction spending in November rose for the third straight month to its highest level in five months.
According to the Commerce Department, construction spending in November increased 0.4 percent to an annual rate of $810.2 billion, the highest level since June.
Happy construction guyEconomists had predicted construction spending in November to rise only 0.2 percent following a 0.7 percent gain in October.
That November 2010 level still falls 6 percent lower than it was in November 2009.
Other November spending stats:
*Spending on private construction increased 0.3 percent $491.8 billion, the highest level since June.
*Private home construction increased 0.7 percent to $235.7 billion. That’s the first time housing construction has seen an increase in seven months.
*Private nonresidential spending fell 0.1 percent to $256.1 billion.
*Public construction spending increased 0.7 percent, the highest level since July 2009.
*State and local government spending on construction projects fell 0.1 percent, a second straight decline.
*Federal spending jumped 8.2 percent to $35.3 billion, an all-time high.
The increase in construction spending, especially in home building, is a sign that the economy has started its recovery. Let’s hope to continue to see those numbers go up as 2011 goes on.