Spending on construction projects in the U.S. unexpectedly rose during August, according to a report showing a broad-based increase among builders despite the listless economy.
Construction spending climbed by 1.4% to a seasonally adjusted annual rate of $799.15 billion, the Commerce Department said Monday. Economists surveyed by Dow Jones Newswires had projected spending to drop by 0.4% in August.
The surprising surge, following a 1.4% tumble during July, was the third increase in four months.
Yet year over year, construction spending was only 0.9% higher than in August 2010. Builders are reluctant to start projects because the economy is weak. Home sales are near record lows, and municipal governments are grappling with budget shortfalls.
The report showed spending on U.S. residential projects rose 0.9% in August to $246.09 billion compared to the prior month, after falling sharply in July.
Spending in August for projects other than housing increased 1.6%, with outlays rising for roads, churches, and schools.
Private-sector spending on construction rose 0.4% to $510.98 billion. Spending on construction in the public sector surged 3.1% to $288.16 billion, as outlays by state and local governments jumped. Yet for the year, public construction spending was down 6.3%.
The author of this article is: Jeff Bater
See the original post at: http://www.foxbusiness.com/industries/2011/10/03/spending-on-us-construction-surges-in-august/
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