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US construction spending up 0.6 percent in July

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buildSpending on U.S. construction projects rose in July, led by strong gains in housing and nonresidential projects.
Construction spending increased 0.6 percent in July compared with June, when activity was unchanged, the Commerce Department reported Tuesday. The June performance represented an upward revision from an initial estimate that spending had fallen 0.6 percent.
“Increasingly, the various reports on construction spending and housing activity remind me of the weather in New Mexico in April. One day it can be warm and exceedingly pleasant, but less than comfortable the next day,” said Jim Folkman, executive vice president of HBA, the Albuquerque area home building organization.
“However, as happens every spring with our weather, I think the general direction of our housing economy, while somewhat inconsistent,  is warming and improving,” he told the Journal.
Added Roxanne Rivera-Wiest, president of Associated Builders and Contractors of NM: “Although recovery remains subdued in many key segments of non-residential construction, many economists continue to predict the 2nd half of this year will be better for the broad economy. We feel this implies better performance in non-residential construction in 2014.”
Total construction activity rose to a seasonally adjusted annual rate of $900.8 billion in July, the strongest performance since June 2009.
The July gain reflected a 0.6 percent rise in housing construction with both single-family and apartment construction posting gains. In June, housing had fallen 0.9 percent.
Government projects fell 0.3 percent in July with state and local spending down 0.4 percent. That drop more than offset a 1.1 percent rise in the smaller federal category.
The advance in housing activity pushed residential construction to its highest level since September 2008.
The increase for nonresidential building was led by a 6.1 percent increase in construction of hotels and motels. Office building and the category that covers shopping centers also showed gains.
Total construction is 5.2 percent higher than it was a year ago with residential activity up 17.2 percent and nonresidential construction up by a more modest 2 percent.

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