US construction spending increases in line with expectations in December

WASHINGTON, Feb 27 (Reuters) - U.S. ‌construction spending ​increased ​in December, lifted by a rebound in single-family homebuilding as well as ongoing strength in ‌home renovations.

The Commerce Department's Census Bureau said on Friday ⁠that construction spending rose 0.3% after falling 0.2% in November. The ‌increase was in line ‌with economists' expectations. Construction spending slipped 0.4% year-on-year in December. The data was delayed by last year's government ​shutdown.

Spending on private construction projects rose 0.5% in December after easing 0.2% in November. Investment in residential ⁠construction increased 1.5% after being unchanged in November. Spending on new single-family housing ​projects rebounded 1.5%. Spending on multi-family housing units, which account for a small share of the ​housing market, rose 0.1%.

Renovations increased ‌further. Despite December's acceleration, homebuilding remained sluggish amid higher mortgage rates, more expensive building materials ⁠because of tariffs on imports, and labor shortages.

A decline in mortgage rates in recent weeks could spur construction, though building ⁠lots remain scarce. Residential investment has declined for four straight quarters.

Spending on ​private nonresidential structures like offices and factories dropped 0.7% in December. Spending on nonresidential structures has contracted for eight consecutive quarters, ‌despite a surge in the construction of data centers to support artificial intelligence.

Investment in public ‌construction projects decreased 0.5% after falling 0.2% in November. ⁠State and local government construction ‌spending declined 0.7% ​in December, but outlays on federal government projects increased 1.6%.

(Reporting by Lucia Mutikani; Editing by Chizu ‌Nomiyama)

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