Construction spending in United States climbs unexpectedly in August this year as public construction projects spring back to business.Economists surveyed by Thomson Reuters are expecting construction dropped of about 0.4 percent in August 2010.
“Given the stress on state budgets, we would not expect to see increases of this magnitude in the coming months,” wrote Omair Sharif, a U.S. economist at Stamford, Connecticut to his clients. “The pullback in construction spending on new homes is likely to lead to residential investment being a drag on growth.”
Investments in private construction projects decreased 0.9 percent, the lowest rate since January of 1998. Private non-residential construction spending also dropped 1.4 percent.
However, according to the Commerce Department, construction spending rose unexpectedly by 0.4 percent in August with a yearly rate of $811.8 billion. This is after July’s 1.4 percent drop, instead of the earlier 1.0 percent fall report.
The construction companies and builders are also trying to recover from the dropping in July. There is also a 2.7 percent increase on the local government and state’s construction projects including work on roads and highways, waste disposal plants, and sewages.
Construction projects on private homes dipped 0.3 percent after falling 3.5 percent. This could lead to stabilization after the sharp drop and declines — for construction projects’ figures according to the Commerce Department.