Janina Lim – Fourth Estate Contributor
United States (4E) – Construction spending in the US rebounded in August after falling two consecutive months in negative territory, as home building, and commercial and government construction outlays spurred growth.
In its latest monthly report on sontruction spending released Monday, the Commerce Department said that construction investment climbed 0.5 percent to $1.21 trillion.
Also, construction outlays in July were adjusted downward to 1.2 percent which is well-below the 0.6 percent drop the agency previously reported.
Economists earlier polled by Reuters had forecast construction spending to rise by only 0.4 percent during the month.
On a year-on-year basis, construction spending went up 2.5 percent.
The agency noted that Hurricanes Harvey and Irma did not seem to impact the construction spending activities as the responses from Texas and Florida, the two areas hit most by the storms were “not significantly lower than normal.”
August spending on private residential projects went up by 0.4 percent, expanding for a fourth straight month while spending on nonresidential structures grew by 0.5 percent, reversing drops logged in the prior two consecutive months.
According to the Commerce Department, Texas and Florida made up about 22 percent of US private nonresidential construction spending last year. This means nonresidential construction spending could fall in September on the back of the effects the typhoons can possibly bring.
Spending in nonresidential structures grew by 0.5 percent during the month while investments on private construction projects expanded by 0.4 percent.
In August, the rate of spending on public construction projects rebounded 0.7 percent, a reversal from the 3.3 percent fallin the prior month.
Spending on state and local government construction projects saw a 1.1 percent increase during the month.
Texas and Florida accounted for 15 percent of U.S. state-and -locally owned construction spending in 2016, according to the Commerce Department. This could mean that possible advances in construction spending in September may be offset by the impact of the hurricanes.
Meanwhile, federal government construction spending plunged to 4.7 percent, its lowest level since April 2007.
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