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Originally published Friday, February 1, 2013 at 7:06 AM

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US construction spending up 0.9 percent

Spending on U.S. construction projects rose in December, ending a year in which construction activity increased for the first time in six years.

AP Economics Writer

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WASHINGTON —

Spending on U.S. construction projects rose in December, ending a year in which construction activity increased for the first time in six years.

Construction spending rose to a seasonally adjusted annual rate of $885 billion in December, the Commerce Department said Friday. That was up 0.9 percent from November, when spending increased a revised 0.1 percent.

For all of 2012, construction spending totaled $850.2 billion, a gain of 9.2 percent from 2011, when construction spending had fallen 3.3 percent. Even with the increase, construction activity is 27.2 percent below the all-time high of $1.17 trillion set in 2006 at the peak of the housing boom.

Construction has been posting a slow recovery, led by housing gains. In December, housing and nonresidential construction posted gains but spending on government projects fell.

The construction gains are helping boost the overall economy which has added nearly 100,000 jobs over the past four months.

In December, spending on residential projects rose 2.2 percent compared to November, the ninth straight monthly gain. Spending on nonresidential projects rose 1.8 percent in December after a 0.3 percent drop in November.

Spending on government projects fell 1.4 percent to $270.1 billion, the lowest level since November 2006. Government activity has been constrained by tight budgets. In December, spending on state and local government projects fell 1.7 percent while spending on federal projects was down 1.3 percent.

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