Construction Spending Surges in August

Washington, DC, Oct. 1, 2009--Construction spending in the U.S. unexpectedly rose at its fastest pace in nearly a year in August, with investment in private residential construction notching its biggest increase in almost 16 years, a government report showed on Thursday.

The Commerce Department said spending on construction projects rose 0.8 percent, the largest increase since September 2008, after a revised 1.1 percent drop in July that was previously reported as a 0.2 percent decline.

Analysts were expecting a 0.l percent fall in overall construction spending in August.

Compared to August a year ago, construction spending was down 11.6 percent.

Private construction spending rose 1.8 percent in August, also the biggest gain since September 2008, from a 1.4 percent decline in July. Private residential construction surged 4.7 percent, the largest advance since November 1993, after 0.6 percent rise the prior month.

The rise in private residential construction will bolster views that a housing market recovery is under way after a three-year slump.