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November construction spending was better than expected

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Construction spending in the U.S. fell 0.6 percent in November, less than half of the 1.3 percent decline that was expected, according to USA Today. Home construction dropped 4.2 percent but was offset in part by a 0.7 percent increase in nonresidential construction.

However, the struggle for housing construction is expected to continue as U.S. homebuilders report large financial losses, and nonresidential projects are expected to stumble, as well.

The 4.2 percent drop in home construction led to an adjusted annual rate of $328.3 billion for residential construction, which is down 23.4 percent compared with a year ago. A 0.4 percent drop in construction in October and the 0.6 percent decline in November have led to a seasonally adjusted annual rate of $1.078 trillion, which is down 3.3 percent compared with a year ago.

Government spending rose 1.4 percent in November with state and local construction increasing 1 percent and federal construction increasing 6 percent. President-elect Barack Obama is urging plans for a massive stimulus plan to battle the economic recession, and part of the plan would increase spending for infrastructure projects that are ready to break ground.


1/8/2009

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