Manufacturing Growth Accelerates; Construction Picks Up

The pace of growth in the U.S. manufacturing sector accelerated in December, its best month since June, according to a report released on Tuesday. A separate report showed that construction spending rose in November.

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The Institute for Supply Management said its index of national factory activity rose to 53.9 from 52.7 the month before. The reading topped expectations of 53.2, according to a Reuters poll of economists.

A reading above 50 indicates expansion.

New orders, which economists consider a leading indicator of future activity in the sector, rose to 57.6 from 56.7. The employment component also jumped to 55.1 from 51.8.

Construction spending also increased in November as builders spent more on single-family homes, apartments and remodeling projects.

The Commerce Department said spending on construction projects rose 1.2 percent in November following a revised 0.2 percent drop in October. The increase was the third in four months and the largest since a 2.2 percent rise in August.

The November increase pushed spending to a seasonally adjusted annual rate of $807.1 billion, still barely half the $1.5 trillion that economists consider healthy. Analysts said it could be four years before construction returns to health levels.

For November, strength was seen in housing and government spending. Nonresidential construction fell, reflecting declines in construction of office buildings and shopping centers.