WASHINGTON Dec 3 U.S. construction spending
rose in October by the most in five months, with stronger
spending on homes outpacing tepid gains in business and
Construction spending climbed 1.4 percent to an annual rate
of $872.1 billion, the highest level in over three years, the
Commerce Department said on Monday. Analysts polled by Reuters
had expected a 0.5 percent gain.
The department also said superstorm Sandy, which hit the
East Coast at the end of October, likely had a minimal effect on
Home building is expected to add to economic growth this
year for the first time since 2005, although the housing sector
remains a shadow of what it was before the 2007-09 recession.
Spending on private residential projects rose 3 percent in
October, a reflection of this year's improving housing market.
Muting the gain in overall construction, however, private
spending on nonresidential projects edged up just 0.3 percent.
Businesses have shown signs they are holding back on
investments because federal austerity plans could trigger a
recession next year, and the construction data could be another
sign of flagging confidence.
Public sector construction spending rose 0.8 percent. State
and local spending dropped 0.1 percent, while outlays on federal
government projects increased 10.7 percent.
(Reporting by Jason Lange; Editing by Neil Stempleman)