The US Commerce Department released construction spending data for November yesterday that showed an increase of 1% MoM (est. +.6%). The spending levels for the prior month were increased to +.9% (previously: +.8%). <p>

Residential spending produced a strong reading (+1.7% MoM) while non-residential spending increased by .6% MoM. On an annual basis, residential spending increased by 16% YoY while non-residential spending increased by .6% YoY highlighting the diverging themes that were present in 2013 and that are likely to remain in place for the early part of 2014. <p>

Construction spending on highways declined by .6% MoM in November leaving the annual change from November 2012 at 4.4%. Highway spending is the most important component of construction spending in the US for CRH. <p>

Overall, we continue to believe that the residential component of construction spending will be the strongest of the above three measures in 2014 and would expect that the non-residential component will improve from current tepid growth levels while the outlook for civil construction will be more lacklustre.
<p><h5>David Holohan</h5>


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