Construction spending up

Construction spending nationwide edged up 0.3 percent last month to a seasonally adjusted annual rate of 1.163 trillion per year, 0.3 percent above the revised August rate of $1.159 trillion per year, the U.S. Census Bureau’s Division of Manufacturing and Construction said last week. Compared with the September 2006 rate of $1.172 trillion, construction spending fell 0.8 percent.
The monthly increase was the first in four months, the bureau said, after revisions erased a previously reported 0.2-percent August increase, leaving that month’s estimate 0.2 percent below the July construction spending rate in July.
Analysts had expected spending to decline 0.5 percent last month from the initial August estimate, based on the median forecast from a survey of 52 economists by Bloomberg News. Demand for factories, office buildings and government construction continued to offset the slump in housing. Nonresidential construction spending – public and private – grew by 1.8 percent in September to a seasonally adjusted rate of $644.0 billion per year, while total residential construction fell 1.4 percent to a rate of $581.8 billion per year.
“I don’t think you have reached the point where nonresidential has turned down,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. “I think that’s a next-year phenomenon.” •
Additional information is available from the U.S. Commerce Department’s Bureau of the Census, Manufacturing and Construction Division, at www.census.gov.