US construction spending highest in over seven years
New data compiled by the US Commerce Department has revealed that construction spending in July reached its highest level since 2008 with an annual spending rate of $1.08tn, having risen by almost 14% in a year. The majority of the money has been spent on the construction of houses, factories and powerplants; a growth in rates of residential construction in particular is believed to have driven the sector’s economic recovery.
Josh Boak

The Associated Press

WASHINGTON (AP) — U.S. construction spending in July climbed to its highest level in more than seven years, boosted by an increase in the building of houses, factories and power plants.

The Commerce Department said Tuesday that construction spending rose 0.7% to a seasonally adjusted annual rate of $1.08 trillion, the highest level since May 2008. The report also revised up the June increase in construction spending to 0.7% from 0.1% previously.

Ground breakings for houses, apartment complexes and commercial centers have helped to improve overall economic growth. The government said last week that the U.S. economy expanded at an annual rate of 3.7% in the April-June quarter, after having edged up just 0.6% in the first quarter.

Total construction spending has risen 13.7% over the past 12 months.

In July, construction of single-family houses advanced 2.1%. Factories rose 4.7%, and power facilities increased 2.1%.

Spending on government building projects slipped 1%, although they have risen over the past year largely because of the construction and maintenance of highways and streets.

The gains from residential construction have laid a foundation for broader economic growth since the beginning of 2014, after the sector suffered severe setbacks during the Great Recession due to the bursting of the housing bubble. The economy entered its seventh year of recovery this summer.

Other reports point to the strength in residential construction.

Housing starts rose 0.2% in July to a seasonally adjusted annual rate of 1.21 million homes, the government said last week. All of July’s gains came from construction of single-family houses, which climbed 12.8% to the highest level since December 2007.