Spending on U.S. construction projects fell in November from October because a steep drop in volatile federal projects offset another gain in home building.
Construction spending dipped 0.3 percent in November, the Commerce Department said Wednesday. It was the first decline since March and followed a 0.7 percent increase in October, which was revised lower.
Total spending declined to a seasonally adjusted annual rate of $866 billion. That is 16.1 percent above a 12-year low hit in February 2011. Even with the gain, the level of spending remained only about half of what’s considered healthy.
The November figures were dragged lower by a 5.5 percent decline in spending on federal government projects. Federal spending fluctuates sharply from month to month. In October, it rose 9.7 percent.
Spending on residential construction, however, has increased steadily over the past eight months and rose 0.4 percent in November.
Paul Ashworth, chief U.S. economist for Capital Economics, said the decline in construction spending was “nothing too much to worry about.”
“This is a volatile series month to month,” Ashworth said. “The recent surge in housing starts suggests that residential-construction spending will expand at a fairly rapid pace this year, particularly when Hurricane Sandy rebuilding is added in.”
Spending on commercial projects dropped 0.7 percent. Spending on office buildings, hotels and shopping centers declined. Overall government spending dipped 0.4 percent.