U.S. Markets

Construction spending hits record high in January

FILE PHOTO: A home under construction stands behind a "sold" sign in a new development in York County, South Carolina, U.S., February 29, 2020. REUTERS/Lucas Jackson/File Photo

WASHINGTON (Reuters) - U.S. construction spending surged to a record high in January, boosted by strong private and public outlays.

The Commerce Department said on Monday that construction spending increased 1.7% to $1.521 trillion, the highest level since the government started tracking the series in 2002. Data for December was revised slightly higher to show construction outlays rising 1.1% instead of 1.0% as previously reported.

Economists polled by Reuters had forecast construction spending would increase 0.8% in January. Construction spending accelerated 5.8% on a year-on-year basis in January. Construction spending accounts for about 4% of gross domestic product.

Spending on private construction projects increased 1.7%, lifted by investment in single-family homebuilding amid cheaper mortgages and a pandemic-driven migration to suburbs and low-density areas. That followed a 1.5% advance in December.

Spending on residential projects rose 2.5% after surging 3.8% in December. Outlays on nonresidential construction like gas and oil well drilling rose 0.4%.

Spending on public construction projects increased 1.7%. State and local government outlays gained 1.3%, while federal government spending soared 6.8%.

Reporting by Lucia Mutikani; Editing by Andrea Ricci