Construction industry in the U. S. is recovering
2023.01.03 13:01
Construction industry in the U. S. is recovering
Budrigannews.com – In November, gains in nonresidential structures led to an unexpected rebound in construction spending in the United States. However, higher mortgage rates continued to hurt single-family homebuilding.
Tuesday, the Commerce Department reported that construction spending increased by 0.2 percent in November after decreasing by 0.2 percent in October.
According to Reuters’ poll of economists, construction spending would decrease by 0.4%. In November, construction spending increased by 8.5% year-over-year.
After falling by 0.7% in October, private construction project spending increased by 0.3 percent.
Private non-residential structures like gas and oil well drilling saw an increase in investment of 1.7%.
However, spending on single-family housing projects fell 2.9% while spending on residential construction fell 0.5 percent. Due to the strong demand for rental housing, multifamily housing project expenditures increased by 2.4%.
The housing market is being stifled by the Federal Reserve’s struggle to contain inflation during the most rapid cycle of interest rate increases since the 1980s. As a result, both home construction and sales are declining.
According to data from the mortgage finance agency Freddie Mac (OTC:), the average 30-year fixed mortgage rate, which reached 7% in October for the first time since 2002, has resumed its upward trend after briefly retreating toward the end of 2022. showed.
The rate found the middle value of 6.42% last week, up from 6.27% in the earlier week. In the same time frame in 2021, the average was 3.11 percent.
The longest such stretch since the collapse of the housing market in 2006 is six consecutive quarters of declining residential investment.
In November, spending on open development projects dunked 0.1% in the wake of expanding 1.6% in October. While federal government construction spending increased by 7.2%, investment in state and local government construction projects decreased by 0.7 percent.
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