U.S. construction spending approaches 4-1/2 year high

Reuters
Apartments are seen under construction in the booming Over-the-Rhine neighborhood in Cincinnati, Ohio
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Apartments are seen under construction in the booming Over-the-Rhine neighborhood in Cincinnati, Ohio July 2, 2013. REUTERS/Aaron P. Bernstein

WASHINGTON (Reuters) - U.S. construction spending hit a near 4-1/2 year high in August, boosted by increases in both private and public outlays, a hopeful sign for third-quarter economic growth.

Construction spending increased 0.6 percent to an annual rate of $915.1 billion, the highest level since April 2009, the Commerce Department said on Tuesday.

Construction spending in July was revised to show a 1.4 percent rise instead of the previously reported 0.6 percent gain.

The report was originally scheduled for release on October 1 but was delayed after the federal government was partially shut down because of a fight over the budget. The 16-day shutdown ended last Wednesday.

Construction spending in August was lifted by a 0.4 percent rise in public construction projects. That was the fourth consecutive month of gains and came even as federal government spending on construction projects tumbled.

There was also a boost from spending on private construction projects, which increased 0.7 percent to its highest level since January 2009.

Private residential construction spending jumped 1.2 percent to a five-year high, showing little sign that high interest rates were slowing activity. Part of the increase in residential construction spending reflected home improvement projects.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

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