U.S. construction spending is at its highest point in more than eight years. After a 1 percent gain in February, construction spending rose another 0.3 percent in March with gains in home building and nonresidential construction making up for the drop in government projects, The Associated Press reports.
After February and March’s increases, total spending is now at a seasonally adjusted annual rate of $1.14 trillion, a level not seen since October 2007. After an initial estimate that stated spending had fallen 0.5 percent for February revised that total to reflect a 1 percent gain. January, however, was revised down to show 0.3 percent drop as opposed to the previously reported 2.1 percent gain.
According to the figures shown in the report, the housing market remains healthy and home construction, which was a rare bright spot for the U.S. economy in 2015 looks to continue shining throughout 2016. In the first quarter of 2016, residential construction grew at a 14.8 percent annual pace, which was a high note for an overall economy that grew at its slowest pace in two years of 0.5 percent (it is expected that the government will revise this number up to 0.7 percent, however).
Home building led the way in terms of construction spending as home construction increased at a 1.6 percent annual rate. Meanwhile, nonresidential construction increased at 0.7 percent. Government project spending dropped 1.9 percent as overall state and local and federal spending fell and spending in the smaller federal government category dropped 7.4 percent.
While single-family construction was flat, multifamily building spiked 5.6 percent. Nonresidential construction’s 0.7 percent rise brought the sector to its own highest total since October 2008 with spending for hotel and motel construction seeing the largest increase at 1.6 percent.
