WASHINGTON (AP) — U.S. builders pushed construction spending up 0.7 percent in December to a record high, though it was the weakest performance since they began to emerge from the financial crisis.
The upward spending marks the fifth consecutive monthly gain, with all major sectors showing modest increases.
The December increase followed a 0.6 percent rise in November, the Commerce Department reported Thursday. It closed out a year in which construction spending rose 3.8 percent. While it was the sixth consecutive annual increase, it was the most meager since a decline in 2011, when companies were breaking free from recession.
For December, spending on housing projects rose 0.5 percent while nonresidential construction was up a stronger 1.1 percent. Spending on government projects rose 0.3 percent as strength at the federal level offset a drop in state and local construction.
For the year, spending totaled $1.23 trillion. The 3.8 percent gain for the entire year followed increases of 11 percent in 2014, 10.7 percent in 2015 and 6.5 percent in 2016.
Construction spending has been slowing for the past two years, reflecting in part problems home builders are having getting land to build new homes and a budget squeeze that has forced state and local governments and federal agencies to scale back building projects.
Residential construction was up 10.6 percent for all of 2017 while nonresidential building showed a slight 0.6 percent increase. Spending on government projects fell 2.5 percent, the second straight annual decline. Spending by state and local governments was down 2.7 percent while spending by the federal government posted a small 0.3 percent increase.
For December, the seasonally adjusted annual rate of $1.253 trillion was a record monthly number. Economists believe construction will support overall economic growth this year, helped by an acceleration in home building.