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Construction Spending June May ! Consensus: !
Overall Spending +0.4% +1.6r ! +0.4% !
Residential +1.3% +3.0r ! Actual: !
! +0.4% !
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By Sarah Portlock and Eric Morath
WASHINGTON--Spending on construction projects rose for the third
straight month in June based on the strength of private residential
builders, another encouraging sign in a series of positive marks on
the long struggling housing market.
Construction spending increased by 0.4% in June to a seasonally
adjusted annual rate of $842.08 billion, the Commerce Department said
Wednesday. It was the highest level since November 2009.
The gain matched the forecast of economists surveyed by Dow Jones Newswires.
Outlays on building in May rose 1.6% to $838.33 billion, according to
revised data, versus an initially reported 0.9% monthly increase.
Private residential construction built on strong readings from the
previous month, rising 1.3% to $265.60 billion, its highest level
since January 2009.
The data reflect other recent gains made in the housing market.
Spending on housing and home improvement projects have had a positive
contribution to the country's economic growth for five straight
quarters, the Commerce Department said last week.
As the number of foreclosed homes falls, that appears to be
encouraging construction of new homes.
"It's nice to be able to say the bright spot in the data is coming
from the housing market," the Treasury Department's top economist, Jan
Eberly, said at a conference Tuesday.
Wednesday's data also showed private nonresidential
construction--which includes spending on offices, manufacturing and
transportation--rose slightly by 0.1% to $302.25 billion in June.
For June, total private-sector construction spending increased 0.7% to
$567.86 billion, the best reading since September 2009.
Gains among private construction helped offset flat public spending from May.
State and local governments increased building by 0.2% in June to
$247.82 billion. But federal construction has fallen in two of the
past three months, dropping in June 1.6% to $26.41 billion.
The Commerce Department report on construction spending can be found
at http://www.census.gov/const/C30/release.pdf.
--Write to Sarah Portlock at sarah.portlock@dowjones.com and Eric
Morath at eric.morath@dowjones.com.
(MORE TO FOLLOW) Dow Jones Newswires
August 01, 2012 10:00 ET (14:00 GMT)
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