Construction spending in the U.S. finished 2011 in a strong way, with December’s $816.4 billion annual rate the highest for spending in four months, according to the latest data from the U.S. Census Bureau.
A 1.5 percent increase from November, December’s totals were also 4.3 percent above December 2010. In the private sector, spending was 2.1 percent above November, increasing from $518.8 billion to $529.7 billion. That increase was mainly due to non-residential spending, which rose 3.3 percent, though residential did increase by 0.8 percent and was 1.1 percent above December 2010.
On the public side, overall spending was up by 0.5 percent from November. Highway construction rose by 1.8 percent, but education construction was down by 0.6 percent.
In a Bloomberg article on construction spending, Michelle Meyer, a senior U.S. economist at Bank of America Corp. in New York, said the outlook on construction is looking up.
“There are certainly bright spots for the construction outlook,” she said, before the release of the report. “Multifamily construction will continue to improve, given the ongoing shift from owning to renting and the lack of supply in the market. It will still be a very slow healing process.”
December’s construction data also adds clarification for January’s Home Market Index from the National Association of Home Builders. A measure of homebuilder sentiment, the index rose four points in January to its highest level since June 2007.
In the Bloomberg piece, Donald Tomnitz, the chief executive officer of D.R. Horton Inc., gave voice to that newfound optimism.
“Although macroeconomic and housing conditions remain soft, we are cautiously optimistic for the remainder for 2012,” Tomnitz said. “Simply put, our business feels more positive.”