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Construction outlays rise
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January 4, 2000: 10:29 a.m. ET
November spending gains 2.6%, led by increase in public sector
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NEW YORK (CNNfn) - U.S. construction activity posted a bigger-than-expected increase in November from October, led by a gain in public-sector construction projects, the Commerce Department reported Tuesday.
Construction spending surged 2.6 percent in November, significantly above the 0.1 percent increase expected by analysts polled by Briefing.com and well above October’s revised 0.1 percent decline. October’s activity initially was reported as a 0.3 percent increase.
Much of the gain was the result of a 5.3 percent gain in spending on public construction, particularly roads and highways. October’s public sector spending was revised to a 0.1 percent drop from an initially reported 2.5 percent increase.
Private sector construction activity rose 1.8 percent in the month, suggesting higher borrowing costs haven’t yet stunted private development, especially in residential construction. Private spending in October was revised to a 0.1 percent decline from an originally reported 0.4 percent drop.
Analysts attributed the larger-than-expected increase in both public and private construction spending in part to rebuilding activity in the wake of Hurricane Floyd, which devastated large parts of the U.S. Eastern seaboard in September.
"We guess much of the strength in November construction, public and private, reflects both Hurricane Floyd reconstruction and the effect of warm fall weather,” said Ian Shepherdson, chief U.S. economist with High Frequency Economics in Valhalla, N.Y. "Either way, it is another boost to fourth-quarter growth.” 
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