The Commerce Department said Monday that construction spending rose 0.4 per cent in December. Total construction spending in 2014 increased 5.6 per cent to $961 billion, with the gains slightly below the pace of 5.7 per cent in 2013.
Spending on single-family houses rose 1.2 per cent in December from the prior month. Highway and street construction grew by 2.1 per cent and factory-building by 1.9 per cent. Construction of schools and commercial centres fell in December.
Over the course of 2014, spending on offices, power plants, factories and lodgings climbed significantly, potentially signalling broader economic growth in 2015 that could further boost residential construction.
Sales of new home sales climbed 11.6 per cent in December to a seasonally adjusted annual rate of 481,000, the Commerce Department said in a recent report. That represents a marked improvement from the total sales of 435,000 for all of 2014.
Solid job growth should spillover into construction. Employers added nearly 3 million jobs in 2014, the most since 1999. Economists surveyed by FactSet ahead of Friday's jobs report say that employers likely added 230,000 jobs in January.
The strong hiring should lead to additional demand for hotels and office buildings, according to the American Institute of Architects' forecast for 2015. The trade group expects that construction spending will increase 7.7 per cent this year on non-residential buildings, led primarily by new offices, hotels, factories and retail development projects.