Wednesday, March 22, 2023

U.S. construction spending rebounds strongly in October By Reuters


© Reuters. FILE PHOTO: Extensive construction continues at an emptier LAX airport, as the global outbreak of the coronavirus disease (COVID-19) continues, in Los Angeles

WASHINGTON (Reuters) – U.S. construction spending increased more than expected in October, boosted by solid gains in investment in both private- and public-sector projects.

The Commerce Department said on Tuesday that construction spending jumped 1.3% in October. Data for September was revised down to show construction outlays declining 0.5% instead of rising 0.3% as previously reported.

Economists polled by Reuters had forecast construction spending would rise 0.8% in October. Construction spending increased 3.7% on a year-on-year basis in October.

Spending on private construction projects advanced 1.4%, fueled by investment in homebuilding amid record-low mortgage rates and a pandemic-driven migration to suburbs and low-density areas. Spending on residential projects shot up 2.9%.

But outlays on nonresidential construction like gas and oil well drilling fell 0.7% in October. The pandemic has crushed oil prices, resulting in a contraction in spending on nonresidential structures in the third quarter. The fourth straight quarterly decline in spending on nonresidential structures bucked a rebound in overall business investment.

Spending on public construction projects increased 1.0% in October.

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