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U.S. Construction Spending Rises for 4th Straight Month

January 6, 2003 - National Edition
Construction Equipment Guide

U.S. construction spending on homes, roads and hospitals edged up in November, while October construction figures were revised significantly higher.

Total construction spending rose 0.3% in November to a seasonally adjusted annual rate of $843.2 billion, the Commerce Department said Friday. October construction spending was revised to a 1% increase after originally being reported up 0.3%. Construction spending has risen for four straight months.

The November construction figures were stronger than Wall Street’s expectations. Most economists were expecting construction spending to rise by 0.1% for the month.

The November construction rise was led by a gain in the residential sector, where construction on homes rose to a record level of $421.1 billion for the month. In percentage terms home construction rose by 0.9% for the monthafter a 1.2% rise in October.

Public construction, which includes roads, sewer systems, hospitals and schools, rose by 1.5% in November after a 0.4% decline in October.

Nonresidential construction, which includes office buildings, edged down by 0.1% in November after a 1.5% increase the previous month. Total private construction, which includes both residential and nonresidential construction, was unchanged for the month.

The construction numbers suggest continued strength in the housing sector, which has remained robust for the past several years even as the overall U.S. economy weakened.

The economy is expected to grow at a less than 2% rate during the fourth quarter as measured by gross domestic product. The Commerce Department is set to release those figures later this month. However, most economists are predicting the economy will show improvement in the current, first quarter.

Year over year, total construction spending was up by 0.8%


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