U.S. construction spending rose 0.2 percent in December and 5.8 percent for the entire year, the government said Friday, in a sign the U.S. economic downturn caused minor ripples in the building sector.

The rise for the year was the smallest annual increase since 1995, when spending rose by 3.5 percent, the Commerce Department said. The monthly increase fell short of the expectations of analysts, who had forecast a 0.3 percent rise.

Spending on construction was at a seasonally adjusted annual rate of $863.6 billion in December, up from a revised $861.8 billion pace aled $862.5 billion, up from $815.4 billion in 2000.

Residential construction spending rose 0.7 percent to $402.2 billion from a revised $399.6 billion, Commerce said. Nonresidential construction fell 0.4 percent to $192.5 percent from a revised $193.3 percent.

All private construction spending rose 0.3 percent to $657.2 billion from a revised $655 billion in November.

The housing sector was an outstanding performer in 2001 despite the U.S. economic slowdown, as home sales set records for the year due to low interest rates and lean inventories. But the nonresidential building area saw declines in activity as a result of setbacks to businesses.