Construction spending rises in Nov.

Associated Press / January 4, 2011

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WASHINGTON — Construction spending increased 0.4 percent in November, the Commerce Department said yesterday. Still, building activity was only 2.3 percent higher than in August, when it had fallen to the lowest level in a decade.

Total spending increased to $810.2 billion in November at a seasonally adjusted annual rate. The strength came from a 0.7 percent rise in private residential construction, which increased to $235.7 billion at an annual rate. It was the third straight gain.

November was the first time in seven months that housing construction, excluding renovation projects, rose.

Ian Shepherdson, chief US economist at High Frequency Economics, said home construction had been declining for months since a federal home-buying tax credit expired. “It now looks as though homebuilding activity has finally hit bottom,’’ he said. “A sustained recovery is still some way off, though.’’

Spending on private nonresidential projects fell 0.1 percent to an annual rate of $256.1 billion.

The one bright spot was federal projects, which jumped 8.2 percent to $35.5 billion — a record.