U.S. construction spending barely rose in August as a surge in outlays on public projects to a more than nine-year high was offset by a drop in investment in private construction, Reuters reports.
The Commerce Department announced this morning that construction spending edged up 0.1%. Data for July was revised up to show construction outlays rising 0.2% instead of the previously reported 0.1% Â gain.
Economists polled by Reuters had forecast construction spending increasing 0.4% in August. Construction spending rose 6.5% on a year-over-year basis.
Spending on public construction projects jumped 2% in August to the highest level since July 2009. That followed a 1.7% increase in July. Spending on federal government construction projects soared 5.9% to a 10-month high after increasing 2.3% in July. State and local government construction outlays accelerated 1.7% in August to the highest level since March 2009. That followed a 1.6% rise in July.
But spending on private construction projects fell 0.5% in August after decreasing 0.2% in July.
Homebuilding has been constrained by rising material costs as well as persistent land and labor shortages. Residential investment contracted in the first half of the year and is expected to have declined further in the third quarter.
