Construction Spending Rises in August

by Warren Seah

Construction spending in the U.S. saw a notable increase in August, with both private companies and the government initiating various projects across the country. According to a report from the Commerce Department on Monday, spending on construction projects rose by 0.5% to reach $1.98 trillion.

Although the figure fell slightly below expectations on Wall Street, economists were still optimistic about the growth potential. They had anticipated a rise of 0.6% in construction spending for August.

Construction spending is a significant indicator of economic activity, as it showcases the amount invested by both government entities and private companies in various projects, including residential properties and infrastructure developments.

In July, the government revised the initial reading for spending on construction, increasing it from 0.7% to 0.9%.

Over the past year, construction spending has seen a remarkable increase of 7.4%, further highlighting the robustness of the sector.

When focusing specifically on residential real estate, private residential construction experienced a rise of 0.6% in August compared to the previous month. Within this category, single-family construction witnessed a substantial increase of 1.7%, while multifamily construction followed suit with a 0.6% rise.

However, there was a decline of 1.1% in spending on public residential construction.

In early trading on Monday, stock markets such as DJIA and SPX showed mixed performance. Furthermore, the 10-year Treasury note (BX:TMUBMUSD10Y) observed an impressive increase of over 4.6%.

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