Strong residential activity pushes US construction spending

Spending on construction projects has continued to climb in the US as the COVID-driven housing boom continues into 2021. A report from the US Commerce Department released Monday showed strong demand and ultra-low mortgage rates pushed US construction spending up by 0.9% to an annual rate of $1.459 trillion in November. The increase followed a 1.6% gain in October, up to a revised rate of $1.447 trillion. Economists polled by Reuters forecast construction spending to climb by 1% compared to the 1.3% rise reported for October. “Strong residential activity has driven construction past pre-pandemic levels, but non-residential outlays remain nearly 6% below their early 2020 pace,” Nancy Vanden Houten, lead US economist at Oxford Economics, told RTTNews. “We expect this divergence in construction spending to narrow a bit as we move through 2020 as some recovery in non-residential outlays is expected to take hold, particul