Construction spending in the country went down in November 2012. However, rates grew when compared to the percentage of the pervious year during the same time period. Experts believe that with the conclusions of the tax decision, the housing and construction markets will accelerate by the second half of 2013.
In the second half of 2012, the housing sector's demand piled up and construction contracts started heaping up. However, the spending on construction slipped by 0.6 percent to $564.1 billion in the month of November 2012, as reported by the U.S. Central Bureau.
"The November construction spending report does not offer many surprises. With fiscal cliff concerns hanging over the heads of decision makers, construction starts activity has been truncated and construction spending momentum has withered," Anirban Basu, chief economist at the Associated Builders and Contractors, told ABC Org.
Public spending in the construction sector fell by 0.5 percent while private spending plummeted by 0.7 percent, reports Realestaterama.
However, private multi- and single-family home construction spending indicate some growth. Spending in the multi-family building construction sector recorded an annual increase of 46 percent, while that of the single-family home construction went up by 24 percent, reports Business Examiner.
"Despite a drop of 0.7 percent in November, the year-over-year total was up by 8.2 percent, and this figure appears poised to return to double-digit percentage gains in the next few months," Ken Simonson, chief economist of The Associated General Contractors of America, said in a news release.
Simonson also released some interesting statistics in the news release. Four cohorts of the private non-residential sector reported some increase in the spending rates over the year. Lodging construction increased by 26 percent over the year, and office construction also grew by 17 percent. Private transport construction recorded a 16 percent growth, while the energy and power construction spiked up 14 percent in a year. All the figures were accounted from November 2011 to 2012.
The association has observed that construction spending in the private residential sector will definitely grow, while spending in the non-residential private sector is indicating a mixed pattern for the coming year.
"With at least some of the fiscal cliff issues now behind us, prospects for renewed construction activity momentum have improved. While improvement in construction activity will likely require several months to become apparent, broader economic factors suggest that pent-up demand for construction has been building," Basu told ABC Org.
Experts believe construction and real estate markets will accelerate in the latter half of the year, reported ABC Org.