Construction finishes big in 2012

By Steve Goldstein, MarketWatch

WASHINGTON (MarketWatch) — Construction spending jumped in December to wrap up a seven-year annual high as the housing market continued its recovery, the government reported Friday.

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An upscale apartment project is seen during construction in the Upper Kirby area on January 7, 2013 in Houston, Texas.

Construction spending picked up at the end of last year, rising 0.9% to an annualized rate of $885 billion, the Commerce Department reported.

November construction spending was upwardly revised to 0.1% growth from an initial read of a drop of 0.3%.

Economists had expected a pick-up in December after a warm month, as a MarketWatch-compiled consensus called for an 0.8% advance.

“December’s outlays were motorized by residential construction, of which multifamily construction surged 6.2% while single-family construction increased 0.8%,” said Eugenio Aleman, senior economist at Wells Fargo Securities, in a note to clients.

For all of 2012, spending grew 9.2%, the best gain since 2005, as the housing market began its recovery — residential construction ballooned by 22.3% last year.

At long last, the pick-up in spending is starting to translate to jobs creation in the sector. The Labor Department said separately Friday that construction employment has grown by 296,000 since January 2011, with one-third of that gain in the last four months. Read more on January jobs data.

Nonresidential construction grew a modest 1.2% in 2012 — reflecting the tentative corporate environment.