U.S. Construction Spending Report: November

WASHINGTON (Reuters) – U.S. construction spending was unchanged in November, as a moderate rise in single-family homebuilding was offset by a sharp decline in multi-family housing projects.

The Commerce Department’s Census Bureau reported on Thursday that the unchanged reading in construction spending followed a revised 0.5% rise in October.

Economists polled by Reuters had forecast a 0.3% gain in November, after a previously reported 0.4% rise in October. Year-on-year, construction spending increased by 3.0% in November.

Spending on private construction projects edged up by 0.1% after a 0.6% increase in October, with residential construction nudging also up by 0.1% thanks to a 0.3% rise in single-family projects.

However, new construction could face challenges from higher mortgage rates, President-elect Donald Trump’s possible import tariffs, and labor shortages from immigration policy changes. Trump’s pledges, including tax cuts, have raised mortgage rates despite the Federal Reserve lowering borrowing costs.

Last month, the U.S. central bank delivered a third consecutive rate cut but projected only two reductions next year compared to the previously forecasted four, citing the economy’s resilience.

Outlays on multi-family housing units fell by 1.3% in November, while spending on home renovations continued to rise. Investment in private non-residential structures like offices and factories remained unchanged.

Spending on public construction projects fell by 0.1% in November, following the same decline in October, with state and local government spending down by 0.1% and federal government projects down by 0.5%.