0.6% Growth in Construction Spending Is Double Analyst Expectations
Construction spending rose 0.6% to a seasonally adjusted annual rate of $900.8 billion for July, according to a Commerce Department report (link opens as PDF) released today. That is the strongest performance since June 2009.
After revised spending stayed steady from May to June, analysts' expectations for July proved too conservative. Their 0.3% growth prediction clocked in at just half of July's actual growth.
Source: Commerce Department.
Private construction provided the main push for July's numbers. Spending increased 0.9% as residential expenditures bumped up 0.6% and nonresidential expenditures jumped 1.3%.
The advance in housing activity pushed residential construction to its highest level since September 2008. The increase for nonresidential building was led by a 6.1% increase in construction of hotels and motels. Office building and the category that covers shopping centers also showed gains.
Public construction spending has been a drag on overall numbers in recent times, and the latest report is no exception. Spending dropped off 0.3%, pulled down by educational construction (-1.5%) and highway construction (-1.1%).
So far for 2013, overall construction spending is up 5.6% compared to the same period in 2012.
-- Material from The Associated Press was used in this report.
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