Construction spending had a strong month in November, thanks to a boost from private single-family and multifamily residential projects. Overall, construction spending was at a seasonally adjusted annual rate of $807.1 billion for the month, a 1.2% improvement from October and a 0.5% increase year-over-year, according to data released by the U.S. Census Bureau today. Minus residential improvements, a poorly estimated category, spending was up 1.0% on a monthly basis.

Total private construction was up 1.0% from October and up 4.0% annually. However, private single-family construction projects were up 1.5% on a monthly basis and 2.5% year-over-year. Spending on private multifamily projects was also up from both October and the previous year, gaining 1.3% and 4.1%, respectively.

"New single-family construction posted its sixth straight monthly increase," wrote Patrick Newport, U.S. economist at IHS Global Insight, in a release regarding the numbers today. "We are projecting modest growth numbers in this category in the first half of this year, but double-digit growth in the second. Spending on multifamily homes posted its first gain in three months. The recent strong gains in multifamily housing starts point to solid increases in multifamily construction throughout 2012."

In the public sector, residential spending was down dramatically, falling 28.5% year-over-year, and down 3.1% from the previous month.

Private spending for nonresidential projects remained flat on a monthly basis but was up 4.0% annually, with a mix of strong and weak sectors. Both lodging and religious spending were down more than 20% on an annual basis. Manufacturing and education spending were each up 10% or more year-over-year. Private projects in the power industry improved on a monthly and yearly basis, gaining 3.0% and 8.4%, respectively.

In public spending, nonresidential projects were up 1.8% from October and down 4.4% annually. Power projects surged 22.1% for the month, but remained 5.1% lower year-over-year. Health-care spending was up 6.5% for the month but down 2.2% annually. Projects in the amusement and recreation, transportation, water supply, conservation and development, and office sectors were each down more than 10% on an annual basis.

The coming year will likely be a hard one for nonresidential construction spending, Newport predicts, as private nonresidential projects will face challenges obtaining funding, and public projects face budget cuts in state and local governments.

Claire Easley is a senior editor at Builder.

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