Construction spending in the United States climbed to a record high in August, helped by a renewed boom in housing. Even bigger gains are expected in coming months, spurred by the massive rebuilding required in the wake of hurricanes Katrina and Rita.
The Commerce Department said Monday that total August spending rose by 0.4 percent, the biggest increase in three months. It pushed building activity to an all-time high of $1.11 trillion (Ђ930 billion) at a seasonally adjusted annual rate. The increase did not include any hurricane-related activity because Katrina did not strike until late in August. But the government said all the spending on the rebuilding of homes and businesses in coming months will add to the construction figures.
The 0.4 percent increase in construction spending matched the May gain. Spending had risen 0.3 percent in July and fallen by 0.5 percent in June.
Private residential construction posted a 0.2 percent increase in August to $614.6 billion (Ђ515 billion) after having shown no gain in July and posting a sizable 0.4 percent drop in June.
Analysts believe that sales of both new and existing homes will set records this year for a fifth straight year but they are forecasting a slight decline in sales activity in 2006 based on expectations that mortgage rates will continue to climb. AM