New Housing Zooms by 7.5%

Housing construction shot up 7.5% in November, the biggest increase in almost a year, and business investment spending is expected to rise 7.3% next year, the government said today in separate reports.

The Commerce Department’s report on construction of new homes and apartments indicated builders were continuing to put up new housing despite the collapse in stock prices.

However, building permits, considered a good sign of future activity, fell 0.7% in November to the slowest pace since January, 1983.

The jump in predicted business investment spending next year would be the best gain since a 9.6% rise in 1985, the Commerce Department said.

The survey indicates that businesses are still optimistic about future expansion plans despite the collapse of stock market prices in October.

Analysts cautioned, however, that businesses are likely to scale back those investment plans if consumer spending falters in the coming months.