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US construction spending up 0.3 percent in September

Associated Press

WASHINGTON (AP) — U.S. construction spending increased 0.3 percent in September as the biggest advance in government building activity in four months offset weakness in other areas.

The Commerce Department said on Wednesday that the September gain followed a tiny 0.1 percent rise in August and declines in June and July.

Despite a slump in homebuilding this year, economists remain optimistic that the low level of unemployment will soon lead to a rebound in sales and construction. The economy grew at a 3 percent annual rate in the third quarter, even though residential construction was down for the second straight quarter.

All of the strength in Wednesday’s report came from a 2.6 percent increase in government construction. State and local activity was up 2.5 percent and federal spending up 3.4 percent.
Residential housing showed no increase, and non-residential construction dropped 0.8 percent, showing its fourth straight monthly decline.

General spending came in at $1.22 trillion at a seasonally adjusted annual rate, a gain of 2 percent from a year ago.

In the non-residential part of the industry, office construction was down 1.1 percent and the category that includes shopping centers was down 1 percent.

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