The United States’ construction spending increased in August as both private sector and governmental spending increased.
According to data released on Monday by the Commerce Department, spending on building projects increased 0.5 percent in August to a seasonally adjusted annual pace of $1.98 trillion.
That was in line with Wall Street's forecast of a gain of 0.5 percent. However, the earlier estimate of 0.7 percent for the prior month was updated to indicate a 0.9 percent increase, so the spending amount for August actually exceeded projections.
The United States has seen growing construction spending for eight months in a row, showing that the impact from higher interest rates is not as great as previously assumed for an industry that is thought to be particularly sensitive to monetary policy. Spending has increased by 7.4% since last year, substantially exceeding inflation.
Spending on residential building increased by 0.6% over the previous month. Private sector residential construction, which accounts for the majority of the money spent on housing in the United States, increased by 0.6 percent. This was the fourth consecutive monthly increase in residential construction. Government spending on housing, a tiny fraction—around one percent—of overall residential construction, fell 1.1 percent.
Residential construction has decreased by 3% from a year before. Government spending is up 3.8 percent while private sector residential development is down 3.1 percent.
Spending by the private sector on brand-new single-family homes increased by 1.7%. This is a decrease of 10.6% from one year prior. This accounts for about 45% of new residential building.
Spending by the private sector on condos and apartments increased by 0.6%. This is up 24 percent from a year earlier. This accounts for about 15% of the cost of building homes.
Home improvement makes up the remainder of residential building in the private sector. According to the data, spending on home improvements fell somewhat in August.
The overall increase in government construction spending was 0.6 percent, or 14.1 percent over the previous year. Spending on highways and streets, the largest category of government construction spending, rose 0.4 percent and is up 12.9 percent from a year earlier.
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