WASHINGTON (Reuters] – The U.S. Construction spending fell in December due to a substantial rise in private construction projects partially offset by a steep decline in government outlays.

According to the Commerce Department, Tuesday’s increase in construction spending was 0.2%, compared with 0.6% November.

According to Reuters, economists had predicted that construction spending would rise 0.6%. In December, construction spending grew 9.0% year-on-year. In 2021, it rose 8.2%.

In December, spending on private projects increased 0.7%. Residential construction expenditures rose 1.1%

Spending on single-family homes jumped 2.1% while spending on multifamily housing projects rose 0.4%.

Higher prices of building materials and framing lumber continue to limit homebuilding. Following a review by the United States, it nearly doubled its duty on Canadian softwood lumber imports to 17.9%. This was after an increase in prices for building materials. The fourth quarter saw residential investment contract for the third quarter.

December saw little change in investment in non-residential private structures such as gas well drilling or oil well drilling. In the October-December quarter, spending on structures fell for the third consecutive quarter.

In December, public construction spending fell 1.6%. Spending on projects of state- and local governments has declined by 1.3% while spending on federal agencies fell by 5.4%.