Public construction spending gained 0.8 percent in November to the highest level since March. It was the fourth straight month of increases. Outlays on state and local government construction projects rose 0.6 percent, also gaining for a fourth consecutive month.
Federal government construction spending surged 3.1 percent after rising 0.2 percent in October.
US manufacturing expanded in December
Economic activity in the manufacturing sector expanded in December, according to The Institute for Supply Management on Tuesday, and the overall economy grew for the 91st consecutive month.
The U.S. manufacturing index was hit 54.7, an increase of 1.5 percentage points from the November reading of 53.2 percent. Economist expected the index to hit 53.5 for December, according to a Thomson Reuters consensus estimate.
The ISM manufacturing index has topped 50 for nine of the last 10 months. A reading above 50 indicates expansion in the manufacturing sector and a reading below 50 indicates contraction.
"Of the 18 manufacturing industries, 11 are reporting growth in December," Bradley Holcomb, chair of the Institute for Supply Management, said in the report.
U.S. factories are steadily rebounding from a rough patch hit in late 2015 and early 2016. The decline in energy prices caused cutbacks in orders for equipment and pipelines, while a stronger dollar and slower economic growth abroad hurt exports.
—CNBC's Berkeley Lovelace and The Associated Press contributed to this report.