Construction Spending Unexpectedly Drops in November

By Gregory V. Harris

WASHINGTON D.C. - U.S. construction spending fell unexpectedly by 0.4 percent in November, as a cooling in residential construction overpowered a small rise in public spending, the Commerce Department reported Monday.

Construction put in place in November decreased to a $1.013 trillion annual rate, compared with an upwardly revised $1.017 trillion in October, according to the report. November's decline was the largest one-month drop since February 2003.

Overall residential spending fell 0.3 percent in November, due mainly to a 0.4 percent fall in private residential construction. The decline in private residential outlays was the largest decrease since January 2002. Still, the pace of private spending on residential construction remained 10.0 percent ahead of November 2003.

Spending on private construction was at a seasonally adjusted annual rate of $777.1 billion, 0.6 percent below the revised October estimate of $781.7 billion. Residential construction was at a seasonally adjusted annual rate of $554.7 billion in November, 0.4 percent below the revised October estimate of $556.7 billion. Nonresidential construction was at a seasonally adjusted annual rate of $222.3 billion in November, 1.2 percent below the revised October estimate of $225 billion.

Public construction spending in November was estimated at $236.3 billion, 0.4 percent above the revised October estimate of $235.2 billion. Educational construction was at a seasonally adjusted annual rate of $65.5 billion, 2.2 percent above the revised October estimate of 64.1 billion. Highway construction was at a seasonally adjusted annual rate of $65 billion, 1.1 percent below the revised October estimate of $65.7 billion.