Construction spending in the U.S. was much stronger than expected in the autumn of 2019, suggesting that the housing sector was giving more support to economic growth than previously thought.
U.S. construction spending increased by six-tenths of a percentage point in November, the Commerce Department said Friday. Analysts had been expecting just half that.
Construction spending estimates for October and September were revised to show that spending increased in those months. Previous estimates showed declines.
Private home-building led the November gain, rising by 1.9 percent. That suggests that strong consumer confidence and lower interest rates are boosting the economy.
Spending on public construction projects rose 0.9 percent in November. Most of this is done by state and local governments, whose spending was up 0.8 percent. Federal construction spending is tiny in comparison and rose 1.7 percent.
Spending on private non-residential structures declined for the third consecutive month, falling 1.2 percent. This category includes factories and other businesses so it may reflect the weakness in manufacturing that hung over the economy as global growth slowed last year. The contrast with residential construction highlights how important the U.S. consumer has become to continued economic expansion.
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