In a market bludgeoned month after month with bad news, November's 0.7% increase in private residential construction spending, as reported Monday by the U.S. Census Bureau, is good news. While starts data for the month is flat compared to October, November's new construction spendingalso came in at a 0.9% increase.
The Census reported overall construction spending during November 2010 of $810.2 billion. Spending on private construction was reported at $491.8 billion.Residential construction, which includes residential improvements, in November was reported to be a seasonally adjusted annual rate of $235.7 billion, compared to October’s $234.1 billion.
Analysts had expected an increase of just 0.2% for residential. According to briefing.com, construction of more expensive homes, or the possibility that construction spending has become more frontloaded as builders drag out completion times in order to keep finished inventories arbitrarily lower, are two possible reasons for the increase.
November’s residential spending is still 65% below the peak spending of early 2006.
Matthew Phair is senior editor, online, at BUILDER magazine.