Construction spending at 5-month high in November

WASHINGTON (Reuters) - Construction spending rose more than expected in November to touch its highest level in five months, a government report showed on Monday, a further sign that the economic recovery was gaining momentum.

The Commerce Department said construction spending increased 0.4 percent to an annual rate of $810.2 billion, the highest level since June, after rising by an unrevised 0.7 percent in October. November's increase in construction outlays marked the third straight month of gains.

Economists polled by Reuters had forecast construction spending gaining 0.2 percent in November.

The report was the latest to indicate an acceleration in the economic growth pace in the fourth quarter after output expanded at a 2.6 percent annualized rate in the July-September period.

Construction spending in November was lifted by investment in public projects, which rose 0.7 percent to $318.5 billion -- the highest level since July 2009. Public construction spending fell 0.3 percent in October. State and local government spending on construction projects dipped 0.1 percent in November, while federal construction jumped 8.2 percent to an all-time high $35.3 billion.

Despite persistent housing market weakness, investment in private construction increased 0.3 percent in November to $491.8 billion -- the highest level since June -- adding to October's 1.4 percent increase. Spending on private home building increased 0.7 percent in November after a 3.9 percent surge the prior month.

However, private nonresidential spending edged down 0.1 percent in November after falling 0.7 percent the previous month.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)