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U.S. construction spending up 1 percent in November

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The Commerce Department said construction spending increased 1 percent in November to a seasonally adjusted annual rate of $934.4 billion. That's the fastest rate since March 2009 and a slight improvement on the revised 0.9-percent gain in October.

Residential construction rose 1.9 percent in November, after falling in October. Homebuilding last exceeded the November pace shortly before the 2008 financial crisis. Spending on single-family homes has increased 18.4 percent year over year, while spending on apartment buildings is up 36.3 percent during the same period.

Those gains are a positive sign for the overall economy. More than two-thirds of the residential construction market comes from single-family homes.

Each new home creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to National Association of Home Builders. The new construction suggests that builders expect buying to continue picking up in 2014.

The construction gains might restart some of the momentum for home sales that has stalled in recent months. Increasing mortgage rates and home prices have hurt affordability. Mortgage rates are nearly a full percentage point higher than in the spring, even though they are close to historic lows.

Rates rose in May when the Federal Reserve first signaled that it might slow its $85 billion in monthly bond purchases, a move Fed officials made after made after a December meeting.

The higher rates have also helped to encourage apartment construction.

As homes become less affordable, more people choose to rent, increasing the demand for apartments and causing builders to begin new residential projects.

Commercial projects also increased 2.7 percent in November. Spending on offices, communication projects and transportation projects contributed to the increase.

Government construction spending fell 1.8 percent after strong gains in October. Declines in expenditures on roadways, health care facilities and sewer systems led much of the decrease.

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  1. I am not by any means judging whether this is a good or bad project. It's pretty simple, the developers are not showing a hardship or need for this economic incentive. It is a vacant field, the easiest for development, and the developer already has the money to invest $26 million for construction. If they can afford that, they can afford to pay property taxes just like the rest of the residents do. As well, an average of $15/hour is an absolute joke in terms of economic development. Get in high paying jobs and maybe there's a different story. But that's the problem with this ask, it is speculative and users are just not known.

  2. Shouldn't this be a museum

  3. I don't have a problem with higher taxes, since it is obvious that our city is not adequately funded. And Ballard doesn't want to admit it, but he has increased taxes indirectly by 1) selling assets and spending the money, 2) letting now private entities increase user fees which were previously capped, 3) by spending reserves, and 4) by heavy dependence on TIFs. At the end, these are all indirect tax increases since someone will eventually have to pay for them. It's mathematics. You put property tax caps ("tax cut"), but you don't cut expenditures (justifiably so), so you increase taxes indirectly.

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  5. Build the resevoir. If built this will provide jobs and a reason to visit Anderson. The city needs to do something to differentiate itself from other cities in the area. Kudos to people with vision that are backing this project.

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