Construction spending rose 0.9% in November to a seasonally adjusted annual rate of $1.182 trillion, above the revised rate of $1.171 trillion in October, the Commerce Department reported Tuesday.
Private residential construction grew 1.0% in November, while private nonresidential construction increased 0.9%. Within residential, single-family bumped up 1.8%, while multifamily fell 2.7% for the period. Public construction rose 0.8% between October and November.
- November's construction spending figure was 4.1% above November 2015, and spending in the first 11 months of 2016 was 4.4% higher than it was for the same period in 2015.
November marked the highest level of construction spending since April 2006, according to the Associated Press. The fact that all three major sectors of the industry — public, residential and nonresidential — saw gains in November demonstrates construction's strength at the end of 2016. And the new prerecession high set in November emphasizes the slow yet steady pace of the industry's rebound from the recession.
Construction spending overall in 2016 came in below economist predictions, but experts are optimistic that the industry will see stronger growth in 2017. Dodge Data & Analytics, for example, predicts a 5% increase in starts this year to a total value of $712.9 billion.
Industry observers are cautiously optimistic about construction growth in the coming year. Although the current cycle has been longer than those in the past, economists don't expect a downturn to occur for another two years. However, the hard-to-predict Trump administration could alter those forecasts with any policy changes that impact the economy.