Construction industry spending, on single-family housing, apartments and remodeling projects grew last November as the economy made a strong finish to 2011, another positive sign that indicates the US economy may finally be entering its recovery phase.
This coincides with several other positive reports, including the news that manufacturing activity is growing, consumer confidence is up and the rate of unemployment has fallen to its lowest level in three and a half years, says the Associated Press.
Last November saw construction projects increase by 1.2%, to a seasonally-adjusted annual rate of just over $800 billion, the biggest increase recorded since last August. Even so, this rate is still some way off the $1.5 trillion pace which is considered to be healthy by most economists.
Daniel Silver of JP Morgan Chase told Associated Press that although single-family home construction is still in a depressed state, it has now seen six consecutive months of growth. Together with other indicators, this appears to be consistent with the belief that housing markets are slowly beginning to improve, stated Silver.
There’s still a long way to go however, and it remains to be seen what kind of effect the ongoing debt crisis in Europe will have on the US recovery. The general feeling is that Europe is already back in recession and unlikely to get out of it anytime soon.
Paul Dales, of Capital Economics, stated that the US will struggle to recover while Europe struggles. He said that it was difficult to see how the US economy could strengthen when the euro-zone was faced with severe recession. In addition, slow growth in Asia is also hindering the US recovery, Dales told the Associated Press.
Another fear is that consumers could still pull back on their spending, something which would significantly affect the chances of growth as it accounts for 70% of all activity in the US economy.
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