US construction spending up 0.7 percent in August
WASHINGTON (AP) — Spending on U.S. construction projects rose in August to the highest point in more than seven years, fueled by home building and government projects.
Construction spending in August increased 0.7 percent from July, when it had risen 0.4 percent, the Commerce Department said Thursday. It rose to a seasonally adjusted annual rate of $1.09 trillion, the highest level since May 2008.
The latest result suggests that businesses remain confident enough in the economy to expand. Construction activity is expected to provide solid support for the overall economy for the rest of the year.
The gains were led by gains of 1.3 percent in home building and 0.5 percent in government construction projects.
Private nonresidential construction also advanced, but by a more modest 0.2 percent. Two key areas — office building and the category that covers shopping centers — both declined.
The 1.3 percent rise in home construction reflected a 4.8 percent surge in apartment construction and a more modest 0.7 percent rise in construction of single-family homes.
The 0.5 percent rise in government construction projects was driven by a 0.5 percent rise in state and local projects and a 0.6 percent rise in federal building projects.
The overall economy, as measured by the gross domestic product, expanded at an annual rate of 3.9 percent in the April-June quarter.
Business spending on structures grew at a 6.2 percent rate during the spring while construction of homes was growing at an even faster 9.3 percent rate after gains of 10 percent over the previous six months.
Economists are forecasting home construction will show further gains in coming months.