Construction spending posts gain
WASHINGTON -- The U.S. Commerce Department reports that spending on construction projects, which had posted five consecutive monthly declines, advanced by 1.9 percent in October, the biggest monthly gain since January.
The increase, which pushed building activity up to a seasonally adjusted annual rate of $863.5 billion, was far better than analysts had been expecting.
Analysts had anticipated that construction might continue its decline, which began in May and reflected a cooling U.S. economy. In September, construction spending had dropped by 0.7 percent following a 0.5 percent August decline.
The rebound in activity was widespread, with spending for new homes, apartments, office buildings and government projects all showing increases in October. The aggressive credit easing by the Federal Reserve, which began in January, has been credited with keeping construction activity from suffering as much as the rest of the economy during the current recession, the nation's first downturn in 10 years.
The 1.9 percent increase in October was the biggest monthly advance since a 2.5 percent rise in January. Spending for residential projects rose 1.3 percent to an annual rate of $398.6 billion following a 0.9 percent drop in September. The increase reflected gains in spending for single-family homes and apartments.
Spending on nonresidential projects was up 1.8 percent to an annual rate of $199.6 billion after a 2.8 percent September decline. Construction of office buildings posted a 4.5 percent rise, helping to offset declines in spending on new factories and hotels.
Government building projects recorded a 3.4 percent hike in October, posting a record annual rate of $205.2 billion following a 2.9 percent increase in activity the previous month. The gains in the government sector included a strong 9.9 percent jump in school construction.