WASHINGTON (AP) — U.S. construction spending posted a
solid gain in May, pushing total activity to the highest point since the fall
of 2008, with the strength led by a big jump in non-residential projects.
Total construction spending increased 0.8 percent in May,
following an even bigger 2.1 percent advance in April, the Commerce Department
reported Wednesday. The gains pushed totaled activity to a seasonally adjusted
annual rate of $1.04 trillion, the highest level since October 2008.
All major categories showed increases in May, led by a
1.5 percent rise in non-residential building, which reflected increases in
spending on hotels, manufacturing facilities and amusement parks. Residential
construction was up a more modest 0.3 percent. Spending on government projects
rose 0.7 percent.
Construction activity is expected to be a source of
strength this year, helping the economy to accelerate after a soft patch at the
beginning of the year.
The 0.3 percent rise in residential building matched the
April gain and was led by a 0.9 percent rise in spending on renovation
projects. Spending on single-family homes was flat, while spending on apartment
projects edged up 0.2 percent in May.
The 1.5 percent rise in non-residential construction
followed sizable gains of 4 percent in April and 3.3 percent in March.
The 0.7 percent advance in spending on government
projects was led by a 6.3 percent surge at the federal level and a smaller 0.2
percent increase in spending on state and local building projects.
The economy went into reverse during the January-March
quarter, shrinking at an annual rate of 0.2 percent, as consumer spending,
construction and other economic activities were hurt by the unusually severe
winter. But economists believe growth posted a solid rebound in the April-June
quarter, predicting the economy expanded at an annual rate of 2 percent or
better. They are forecasting even faster growth of around 3 percent in the
second half of the year.
Both the commercial and residential real estate markets
appear stronger this year. Almost 60 percent of the real estate executives
participating in a recent survey by the law firm Akerman LLP said they were
more optimistic about the market than in 2014.
Developers say they are better-funded and finding more
opportunities in the residential, commercial and retail sectors. The job growth
over the past year has been substantial enough for some builders to launch
office projects without pre-existing rental commitments.
"It's fueled by the feeling that the job growth is
there, and tenants have need for more space because of new employees,"
said Richard Bezold, who is chairman of Akerman's real estate practice.
Source: Times
Union
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