Construction spending in January 2016 was reported by the U.S. Census Bureau on Tuesday. The total spending surged 1.5 percent to a seasonally adjusted annual rate of $1.141 trillion compared with December 2015, hitting the highest level since October 2007. The growth rate of the total construction spending hardly beat the expectations from economists surveyed by Reuters and Bloomberg News at 0.5 percent.
Both the public sector and the private sector present increases in outlays. Seasonally adjusted total spending in public sector rose 4.5% compared with December 2015 and achieved a gain of 13% compared with January 2015. The boom in public sector mainly due to the increase in highway and street construction. Outlays in highway and street construction was $110,369 million in January, comprised 36.3% of the total public construction. Education, on the contrary, declined by 1.9 percent compared with December 2015 but was up 11.7% from the same period of last year.
Seasonally adjusted total spending in private sector gained a monthly increase at 0.5% compared with December 2015 and was 9.5% higher from January 2015. Spending on non-residential component had a 1.0 percent monthly gain. Most subcomponents achieved growth except for several plummeted ones like financial, drug store and building supply store. It is not surprised to find that outlays in the residential component was flat since home building activities in January showed no gain.
Economists are optimistic that construction will continue to show solid gains this year, helping to boost overall economic growth. Besides, residential spending is expected to strengthen in the coming months as we`ll get some payback from the recovering housing market and supports of building from warmer weather.