Washington, DC, Nov. 3--U.S. construction spending climbed in September, fueled by another strong month of home building.
Total construction spending came in at a seasonally adjusted annual rate of $910.6 billion, the Commerce Department said Monday. In dollar terms, this was the highest level on record. September's increase followed a 0.7% rise in August, revised up from an initial estimate of a 0.2% gain.
The September construction numbers were stronger than Wall Street expected. Economists had called for construction spending to rise 0.3% for the month.
The report showed that private construction rose 1.7% in September after a 0.7% increase in August. Private construction includes spending on houses, office buildings, factories and hospitals.
Within that category, residential construction advanced 1.4% to a record-high seasonally adjusted annual rate of $471.4 billion. Nonresidential construction rose 2.5%, the biggest one-month gain since Oct. 2002, to a $219.2 billon annual rate. This was the fastest rate since March, the report said.
The housing market has remained strong for the past several years, including throughout the 2001 recession. Mortgage rates remain at historically low levels, although they have risen somewhat in recent months. Commercial real estate markets did not fare as well and have struggled during the downturn.
In September, there was little change in spending on public construction, which includes roads, sewer systems and schools, the Commerce Department said. An increase in spending at the state and local level was offset by a big drop in federal construction outlays.
Federal construction spending fell 7.2% in September, the report said. This was the biggest one-month drop since November 2001. State and local construction rose 0.7% in September.
From September 2002 to September 2003, total construction spending was up by 6.5%.
