Dive Brief:
- Construction spending rose 0.7% between July and August to a seasonally adjusted rate of $1.09 trillion, the Commerce Department reported Thursday.
- August spending, which was 13.7% higher than during August 2014, reached its highest level since May 2008. August represented the ninth-straight month of construction spending gains.
- Private residential construction rose 1.3%, while private nonresidential construction rose 0.2%. Public construction saw a gain of 0.5%.
Dive Insight:
August's spending results contrast July's, when private nonresidential construction led the month's increase, rising 1.5% to its highest point since October 2008. The Commerce Department also revised July's spending estimate down from a 0.7% increase to a 0.4% increase.
The 1.3% increase in homebuilding spending was the largest percentage gain of any sector, which Reuters said represented "a sign the housing market was helping the overall economy."
The Commerce Department's report offered good news for the housing market, which seems to be slowing down after a strong first half of the year. In August, pending home sales dipped 1.4%, housing starts fell 3.0%, and existing home sales slipped 4.8%. In one bright spot for the month, new home sales rose 5.7%.
