Spending on U.S. construction projects rose in August to its highest point in more than seven years, due largely in part to home building and government projects.
Construction spending for August was up 0.7 percent from July, when it had already risen 0.4 percent from the preceding month. Construction spending rose at a seasonally adjusted annual rate of $1.09 trillion, and that is the highest level since May 2008!
The latest result suggests that the business sector remains confident in the economy to expand and construction activity is expected to provide solid support for the overall economy for the rest of the year.
The gains were led by a 1.3 percent increase 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, being 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. For those of you who have been working in the oil fields of North Dakota, now would be a great time to thaw-out and pick up a nice construction job in Hawaii. D.R. Horton is developing a master project on Oahu of nearly 12,000 units called Hoopili that will be in development for 20 to 30 years and it’s time to transition your skills out of oil and into homes for Main Street!
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