Partly reflecting a spike in spending on residential construction, the Commerce Department released a report on Monday showing U.S. construction spending increased by slightly more than expected in the month of December.
The Commerce Department said construction spending jumped by 1.0 percent to an annual rate of $1.490 trillion in December after surging up by 1.1 percent to a rate of $1.476 billion in November. Economists had expected construction spending to climb by 0.9 percent.
Spending on private construction increased by 1.2 percent to a rate of $1.138 trillion, as a 3.1 percent spike in spending on residential construction more than offset a 1.7 percent slump in spending on non-residential construction.
The report said spending on public construction also rose by 0.5 percent to a rate of $352.8 billion, with spending on educational construction and highway construction climbing by 0.6 percent and 0.9 percent, respectively.
The Commerce Department said the value of construction in 2020 was $1.430 trillion, 4.7 percent above the $1.365 trillion spent in 2019.
“We look for a gradual recovery in private, nonresidential investment as the recovery takes hold, while we expect the pace of housing starts to moderate slightly,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.
She added, “Public outlays will likely continue to be constrained by tight state and local budgets despite a better than expected performance for revenues during the pandemic.”