WASHINGTON – U.S. construction spending rose 0.6 per cent in September to the highest level since March 2008, pushed up by a surge in apartment building.
The Commerce Department said Monday that spending on construction rose to a seasonally adjusted annual rate of $1.09 trillion. Construction of apartments and condominiums jumped 4.9 per cent in September from August, while construction of single-family homes rose 1.3 per cent. Overall, private residential construction rose to the highest level since January 2008.
The housing market has proven relatively resilient this year amid economic weakness overseas that has hurt American manufacturers and limited hiring. Commerce reported last week that private investment in housing grew at an annual pace of 6.1 per cent from July through September — four times the 1.5 per cent growth registered by the overall economy.
Spending on nonresidential construction slipped 0.1 per cent in September, Commerce said. But spending on construction of churches and other religious buildings rose 5.6 per cent.
Public construction grew 0.7 per cent from August. Spending on schools and other educational buildings rose 2.4 per cent, and spending on water supply facilities was up 4.8 per cent.
Federal construction spending fell 1 per cent, the biggest decline since a 4.4 per cent drop in June.
“On the surface, today’s data net out to be somewhat reassuring, if not perfect,” said Diane Swonk, chief economist at Mesirow Financial. “Friday’s employment report will be the primary focus of the Federal Reserve, where the threshold for liftoff is low.”
The Fed last week held off from raising interest rates from record lows but signalled that they will be considering a move at its Dec. 15-16 meeting. For the Fed to delay a hike again, the upcoming jobs report would have to be a “disaster,” Swonk said.