Washington, DC, Jan. 3--Construction spending rose by 0.3% in November, helped by record activity in the housing market, according to the Commerce Department.
Building activity totaled $843.2 billion at an annual rate in November, up from an annual rate of $840.5 billion in October, a month when activity had jumped by an even stronger 1%.
The strong performance was spurred by a 0.9% increase in spending on residential construction, which rose to a record $421.1 billion at an annual rate in November.
The construction report showed that the strength in residential spending came from a big jump of 1.6% in spending on single family homes. Apartment construction rose by a strong but smaller 0.5%.
Spending on non-residential construction projects fell by 0.1% in November to an annual rate of $158.7 billion. This sector has lagged for most of the year, reflecting a reluctance by businesses to commit to spending on new plants and offices because of the uncertain economic outlook. That uncertainty has increased in recent months over worries about how a possible U.S. invasion of Iraq will affect oil prices and overall economic prospects.
Spending on new factories fell by 1.5% in November while spending on office construction was down by 0.5%.
Spending on public building projects rose by 1.5% to $207.9 billion in November with school construction up by 1.5% and highway construction rising by 2.8%.
