Construction Spending Improves in August

Washington, DC, Oct. 1, 2008--U.S. construction spending was unchanged in August, as private residential building increased for the first time since March 2007 and work on commercial projects fell for a fourth month, a government report showed.

The stronger-than-forecast figure followed a revised 1.4 percent drop for July that was initially reported as a 0.6 percent decline, the Commerce Department said today in Washington. The value of private residential projects increased 0.3 percent.

The worst housing recession in a generation prompted builders to scale back projects for more than two years, as stricter lending regulations and falling prices weigh on demand. A deepening credit crunch since August raises the risk that homebuilders and other businesses will cut back even more.

Economists predicted construction spending would fall 0.5 percent for the month.

Private non-residential construction decreased 0.8 percent, the report showed. Work on public projects rose 0.8 percent after a 1.3 percent increase the prior month.