Construction spending dipped 0.4 percent in November following a 0.3 percent increase in October, the Commerce Department reported last week. It was the first decline in activity since a 0.7 percent dip in June 2014.
Home construction increased 0.3 percent, but nonresidential construction was down 0.7 percent, reflecting declines in a variety of categories including hotels, shopping centers and manufacturing plants.
Government construction was also down in November, declining by 1 percent, the third straight drop. State and local spending fell 0.4 percent, and the smaller federal category dropped 7.2 percent.
Construction, fueled by gains in housing, has been a positive for the economy and analysts look for further support in 2016.
The decline in overall activity in November still left construction spending at a seasonally adjusted annual rate of $1.12 trillion, 10.5 percent higher than a year ago.
The November rise in home construction reflected a 0.6 percent increase in spending on single-family homes, which offset a 0.7 percent drop in spending on apartment construction.
The decline in nonresidential construction was led by a 4 percent drop in spending in manufacturing, a sector that has struggled over the past year with weakness in major export markets and also a stronger dollar, which makes American products less competitive overseas.
Reader Comments