WASHINGTON (Reuters) - U.S. construction spending raced to a record high in December as historically low mortgage rates powered outlays on private projects.
The Commerce Department said on Monday that construction spending increased 1.0% to $1.490 trillion, the highest level since the government started tracking the series in 2002. Data for November was revised higher to show construction outlays surging 1.1% instead of 0.9% as previously reported.
Economists polled by Reuters had forecast construction spending would increase 0.9% in December. Construction spending rose 5.7% on a year-on-year basis in December. Construction spending, which accounts for about 4% of gross domestic product, advanced 4.7% in 2020.
Spending on private construction projects rose 1.2%, boosted by investment in single-family homebuilding amid cheaper mortgages and a pandemic-driven migration to suburbs and low-density areas. That followed a 1.5% jump in November.
Spending on residential projects shot up 3.1% after increasing 3.0% in November. But outlays on nonresidential construction like gas and oil well drilling fell 1.7% in December. Still, spending on nonresidential structures rebounded in the fourth quarter after four straight quarterly declines.
Spending on public construction projects gained 0.5%. State and local government outlays rose 0.4%, while federal government spending increased 1.3%.