US construction spending slips, manufacturing growth slows

WASHINGTON (AP) -- A sharp slowdown in government-built schools and infrastructure caused U.S. construction spending to fall slightly in November. Meanwhile, factory activity grew at the slowest pace in six months in December, weakened by declines in orders and production.<br /> <br /> The Commerce Department said Friday that construction spending slipped 0.3 percent in November, after having climbed an upwardly revised 1.2 percent in October and 0.6 percent in September.<br /> <br /> Much of the decline came from a 1.7 percent retreat in government expenditures. Publicly-built school spending fell 2.5 percent, while the transportation, health care and public safety sectors also fell.<br /> <br /> Private construction spending rose a modest 0.3 percent in November. Home-building climbed 1 percent in November, offsetting the declines in the office, commercial and health care-related construction.<br /> <br /> Total construction spending has improved a mere 2.4 percent from a year ago to $974.9 billion.<br /> <br /> GROWTH OF US FACTORIES<br /> <br /> U.S. factory activity grew at the slowest pace in six months in December, weakened by declines in orders and production. Yet growth was still healthy, a sign manufacturing may help drive the economy's expansion in 2015 as it did last year.<br /> <br /> The Institute for Supply Management, a trade group of purchasing managers, said Friday that its manufacturing index fell to 55.5 in December from 58.7 in November. Any reading above 50 signals expansion. November's figure was just below a three-year high reached in October.<br /> <br /> December's reading is the lowest since June. But it is also close to the average for all of 2014 and remains at a solid level. Americans are buying more cars and appliances, boosting demand for factory-made goods. Economists also forecast that businesses may spend more on industrial equipment this year, which would also lift output.<br /> <br /> A labor dispute at West Coast seaports, from San Diego to Seattle, has interrupted the shipment of raw materials for many manufacturers, the ISM survey found. That has disrupted production and likely contributed to the lower reading.<br /> <br /> Despite the decline, most economists are optimistic about manufacturing's prospects in 2015.<br /> <br /> "These were readings that in any ordinary time would be considered excellent," Guy Berger, an economist at RBS Securities wrote in a note to clients.

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