WASHINGTON (Reuters) – U.S. construction spending was unchanged in November as a moderate rise in single-family homebuilding was offset by a sharp decline in outlays on multi-family housing projects.
The Commerce Department’s Census Bureau said on Thursday the unchanged reading in construction spending followed an upwardly revised 0.5% rise in October.
Economists polled by Reuters had forecast construction spending would gain 0.3% in November after a previously reported 0.4% rise in October. Construction spending increased 3.0% on a year-on-year basis in November.
Spending on private construction projects edged up 0.1% after increasing 0.6% in October. Investment in residential construction nudged up 0.1%, with outlays on new single-family projects rising 0.3%.
New construction could be hampered by higher mortgage rates, President-elect Donald Trump’s threat to impose tariffs on imports, and the labor shortages that could result from his incoming administration’s broad promise to deport immigrants. Trump’s policy pledges, including tax cuts, have contributed to the elevation in mortgage rates even as the Federal Reserve has been lowering borrowing costs.
The U.S. central bank last month delivered a third consecutive rate cut, but projected only two reductions in borrowing costs next year compared to the four it had forecast in September, citing the economy’s continued resilience.
Outlays on multi-family housing units fell 1.3% in November. Spending on home renovations continued to increase.
Investment in private non-residential structures like offices and factories was unchanged in November.
Spending on public construction projects dipped 0.1% in November after easing by the same margin in October. State and local government spending slipped 0.1%, while outlays on federal government projects dropped 0.5%.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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