Construction Spending Hits Record

Despite rising 0.4 percent December misses forecasts; non-residential spending hits 6-1/2 year low.

February 2, 2004

WASHINGTON (Reuters) - U.S. construction spending hit another record in December as low mortgage rates fueled a strong housing market, a government report showed Monday, but nonetheless missed forecasts on Wall Street.

Overall construction spending rose 0.4 percent to a seasonally adjusted $933.2 billion in the month from a downwardly revised $929.8 billion in November, the Commerce Department said. Analysts polled by Reuters had been expecting a 0.7 percent increase.

It was the sixth month in a row in which construction spending reached a new plateau. Outlays for total private construction, private residential construction and state and local construction all rose to fresh records.

At the same time, private non-residential construction spending dipped to $210.2 billion, the lowest since June 1997 -- a reflection of the slow recovery in business investment since the 2001 recession despite signs of rebounding growth in the broader U.S. economy.

http://money.cnn.com/2004/02/02/news/economy/construction.reut/index.htm