Construction spending in August rose by 0.6% over revised July levels to reach a seasonally adjusted annual rate of $915 billion, the U.S. Census Bureau has announced.
Bloomberg Businessweek says this was the fifth consecutive month of gains and was about 50% better than the median forecast of economists it interviewed.
Although the month-to-month gain was small, the government says that August’s spending level was more than 7% above that of August 2012. During the first eight months of the year, private and public construction totaled $582 billion, about 6% more than the previous year.
Private construction was up 0.7% to an annual rate of $640 billion, with residential construction accounting for $340 billion of the total, 1.2% above revised July estimates. Public construction projects gained 0.4% to $274 billion.
Gains came in spite of higher interest rates, but Bloomberg says that higher borrowing costs are having an impact. The news service reports that sales of single-family homes, condos, and co-ops dropped in September for the first time in three months. At the same time, prices were up, lowering affordability to an almost five-year low.
The Census Bureau says data for September and October will be released on Dec. 2.
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