According to the Commerce Department on January 3rd, Spending on construction projects rose 0.4% in November to a seasonally adjusted annual rate of $1.63 trillion, less than the Wall Street Journal’s prediction of a 0.7% increase.
These spending hikes add to another 0.4% gain in October. Over the past year, spending increased 9.3%.
The gowth’s bulk comes from residential construction, which rose by 0.9%, up 16% over the past year. However, public spending dipped, falling 0.2% to a total of 0.9% over the last year. Non-residential remained flat, up 3.4% over the previous year.
However, non-residential office construction declined a whopping 32.1% over the past 12 months. Some economists attribute this to reduced operations during the pandemic; many have gone remote or hybrid and need less office space.
While many economists disagree on the permanence of declined business operations, some point to COVID-19 and its variants as permanent fixtures. They anticipate that many elements of the pandemic, including social distancing, virtual meetings, and masks, could become normal in business.