Construction Spending Up For Fourth Month

Construction spending continued to climb in June, reaching the highest level since November 2009 and sustaining the cautious optimism that has characterized the housing market for the first half of 2012.

Construction spending increased in June for the fourth consecutive month, closing in on a three-year high and predicting positive prospects for the housing market in the second half of the year.

June spending increased to a seasonally adjusted annual rate of $842 billion, a 0.4 percent increase over May, which was upwardly revised to a 1.6 percent increase in its own right. The June figure is the highest since November 2009, according to the Commerce Department report released August 1.

A 1.3 percent month-to-month increase in private residential construction spending (totaling $265.6 billion) was the strongest improvement in any category. Private nonresidential spending and public construction spending were virtually unchanged from the month before, educational construction spending fell 1.4 percent, and federal highway construction increased 1.5 percent to $80.4 billion.

The annual rate for total construction spending is up a seasonally adjusted 7.0 percent since June 2011, and increased 9.0 percent when seasonal adjustments are not factored in. Seasonally adjusted private residential construction is up 10.7 year-over-year, and will likely continue to grow as inventories shrink and consumer demand increases.

second paragraph