Spending on U.S. construction projects rose to an all-time high in January, with strong gains in home construction and government building projects.
The Commerce Department reports that construction spending increased 1.8 percent in January, the strongest monthly rise in nearly two years, pushing totally spending to a record seasonally adjusted annual rate of $1.37 trillion.
Spending on home construction jumped 2.1 percent, the strongest gain since August. The strength came from single-family home construction which rose 2.7 percent while apartment building was unchanged.
Home building has been seeing strong gains since the summer as falling mortgage rates have helped to spur a rebound after more than a year of lagging activity.
Nonresidential construction was up 0.8% in January with spending in the category that includes shopping centers and religious centers showing some of the biggest gains.
Spending on government building projects 2.6% with spending by state and local governments rising 2 percent to an all-time high while spending by the federal government was up 9.9 percent – to the highest level since May 2012.
After six quarters of declining activity in housing, residential construction has grown at solid rates for the past two quarters with economists expecting that growth to continue this year.
The overall economy grew at a moderate 2.1 percent annual rate in the final three months of last year but analysts are concerned that the spreading coronavirus will depress U.S. growth in the first part of this year because of disruptions to supply chains and cancellations of public events.
Federal Reserve Chairman Jerome Powell said in a statement that the Fed would be prepared to act to support economic growth if needed.