A sharp slowdown in government-built schools and infrastructure caused US construction spending to fall slightly in November.
The Commerce Department said that construction spending slipped 0.3% in November, after having climbed an upwardly revised 1.2% in October and 0.6% in September.
Much of the decline came from a 1.7% retreat in government expenditures. Publicly-built school spending fell 2.5%, while the transportation, health care and public safety sectors also fell. Private construction spending rose a modest 0.3% in November. Home-building climbed 1% in November, offsetting the declines in the office, commercial and health care-related construction.
Total construction spending has improved a mere 2.4% from a year ago to USD 974.9 billion.
Construction activity has lagged broader economic growth for much of 2014, hampered by limited gains in homebuilding. Few potential buyers can afford new homes, a reflection of meager wage growth, tight credit standards and builders focused on pricier housing developments that are beyond the financial reach of most home-seekers.
Residential construction spending declined 0.5% over the past 12 months to USD 352.7 billion, although solid gains in the past two months suggest that homebuilding activity likely helped economic growth in the final quarter of 2014.
Source – Associated Press
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