Private residential construction spending climbs in November

According to the Census Bureau, private residential construction spending increased 2 percent during November, as reported by the National Association of Home Building (NAHB). While the initial estimate for October was revised lower to 2.3 percent (from 3.4 percent), this was offset by an increase in the September reading from 0.6 percent to 1.5 percent. Private residential construction spending has risen in each of the last four months.

The new single-family component of construction spending increased for the sixth consecutive month during November, notching a 1.5 percent month-over-month increase. On a year-over-year basis, this category jumped 2.5 percent. The new single-family housing market continues to face roadblocks, but the recent improvement in new single-family construction spending is consistent with other indicators such as the gain in new single-family home sales and rising homebuilder sentiment. In addition, the upward trend in building permits for new single-family homes points to more gains in spending activity over the near term.

Spending on new multifamily housing increased 1.3 percent on a month-to-month basis in November, partially offsetting the declines registered in the prior two months. On a year-over-year basis, however, the recovery in multifamily construction activity becomes more apparent as spending is up 4.1percent compared with November 2010.

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