Construction spending rose to a seasonally adjusted annual rate of $885 billion in December, the Commerce Department said Friday. That was up 0.9 per cent from November, when spending increased a revised 0.1 per cent.
For all of 2012, construction spending totalled $850.2 billion, a gain of 9.2 per cent from 2011, when construction spending had fallen 3.3 per cent. Even with the increase, construction activity is 27.2 per cent below the all-time high of $1.17 trillion set in 2006 at the peak of the housing boom.
Construction has been posting a slow recovery, led by housing gains. In December, housing and nonresidential construction posted gains but spending on government projects fell.
The construction gains are helping boost the overall economy which has added nearly 100,000 jobs over the past four months.
In December, spending on residential projects rose 2.2 per cent compared to November, the ninth straight monthly gain. Spending on nonresidential projects rose 1.8 per cent in December after a 0.3 per cent drop in November.
Spending on government projects fell 1.4 per cent to $270.1 billion, the lowest level since November 2006. Government activity has been constrained by tight budgets. In December, spending on state and local government projects fell 1.7 per cent while spending on federal projects was down 1.3 per cent.