US spending on construction projects rises 1.7% in January

In this Dec. 1, 2020 file photo, workers toil on new homes under construction in a development near Chatfield State Park in Littleton, Colo. Spending on U.S. construction projects increased 0.9% in November as strength in home building offset weakness in other parts of the construction industry. The Commerce Department said that the November gain followed a bigger 1.6% rise in October and left construction spending up 4.4% through the first 11 months of 2020 compared to the same period in 2019. (AP Photo/David Zalubowski, File)

SILVER SPRING, Md. (AP) — Spending on U.S. construction projects rose 1.7% in January as new home building continues to lift the sector.

Last month's increase followed small revised gains in December and November.

Spending on residential construction rose 2.5% in January, with single family home projects up 3%, the Commerce Department reported Monday.

Despite an economy that’s been battered for nearly a year because of the coronavirus pandemic, historically low interest rates and city dwellers seeking more space in the suburbs and beyond has boosted home sales. Last week, the Commerce Department reported that sales of new homes jumped 4.3% in January, and are 19.3% higher than they were last year at this time.

In a separate report, the government reported that applications for building permits, which typically signal activity ahead, spiked 10.4% in January.

Spending on government projects, which has been constrained by tight state and local budgets in the wake of the pandemic, rose 1.7%.

Non-residential construction was up 0.4% after months of declines, but is still down 10% from January of last year. The category that accounts for hotels also ticked up 0.7% but is still down a whopping 22.7% from the same time last year as the travel and leisure sector has been one of the hardest hit by the pandemic.

Total spending on construction in January was $1.52 billion, 5.8% higher than January 2020.