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US construction spending jumps to near 6-1/2 year high
[WASHINGTON] US construction spending surged in April to the highest level in nearly 6-1/2 years as outlays increased broadly, pointing to some pockets of strength in the economy.
Construction spending jumped 2.2 per cent to an annual rate of $1.0 trillion, the highest level since November 2008, the Commerce Department said on Monday. The per cent increase was the largest since May 2012.
March's outlays were revised to show a 0.5 per cent increase instead of the previously reported 0.6 per cent fall. Economists polled by Reuters had forecast construction spending rising 0.7 per cent in April.
The report adds to business spending plans, employment and housing data in suggesting some momentum in the economy early in the second quarter even as consumer spending and industrial production have been soft.
The economy contracted at a 0.7 per cent annual rate in the first quarter.
But with output held down by a confluence of temporary factors, including a problem with the model the government uses to smooth the data for seasonal fluctuations, the decline in gross domestic product likely overstates the economy's weakness.
In April, construction spending was buoyed by a 1.8 per cent increase in private construction spending to the highest level since October 2008. Outlays on private residential construction rose 0.6 per cent and spending on private non-residential construction projects jumped 3.1 per cent to a six-year high.
Public construction outlays soared 3.3 per cent as spending on state and local government projects - the largest portion of the public sector segment - offset a 3.6 per cent decline in federal government outlays.
Spending on state and local government construction projects rose 3.9 per cent to the highest level since October last year.