Construction spending shot up 7.9 percent last year, the government said Tuesday, including an unexpected 2.6 percent advance in December that analysts said provided momentum for the new year.
The Commerce Department said residential, non-residential and government spending totaled a record $470.3 billion in 1993, up from $436.0 billion in 1992 when spending increased 8.1 percent. Construction spending during the recession had fallen 8.8 percent in 1991 and 0.3 percent in 1990 after rising 2.6 percent in 1989.
In December, spending totaled a record $513.1 billion at a seasonally adjusted annual rate, up from $500 billion in November. It was the eighth straight increase, the first eight-month string of advances since November 1983-June 1984.
In another report, the National Association of Purchasing Management said its latest survey showed that U.S. manufacturing expanded for the fifth straight month in January to the highest level in 5 1/2 years. The group also said prices showed a potentially troublesome rise. It said the rate of manufacturers’ price increases rose to the highest level since November 1990.
The purchasing managers group said its monthly index of manufacturing activity, based on a survey of its 35,000 members nationwide, surged to 57.7 percent in January from 57.1 percent in December. It was the highest level since a 58.2 percent reading in July 1988.
For the construction report, many analysts had forecast a 1.5 percent advance in December, citing a 6.2 percent jump in housing starts at year’s end. Residential spending rose 2.8 percent in December to $228.6 billion from $222.3 billion in November. The eighth straight gain helped boost the value of residential building by 11.5 percent for 1993, to $144.5 billion from $129.6 billion in 1992.
Construction of single-family homes jumped 3.7 percent in December to a $150.5 billion annual rate. But spending on apartment buildings was unchanged at $11.2 billion. Non-residential spending was up 2.3 percent, to $99.3 billion.
