U.S. construction sees strongest growth in five months

by Megan Donofrio

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Construction spending in the U.S. rose 1.4 percent in October, increasing across all significant building categories and marking the strongest boost in five months.

The Commerce Department said the October increase in U.S. construction spending represents the third consecutive monthly gain. This following the smaller-scale growth in September of 0.3 percent and August of 0.5 percent.

While there was a decline in apartment building of 0.4 percent, there was an increase in home building, particularly in single-family construction. Home building has been fairly stagnant around the country this year, but economists anticipate an upswing in this type of construction in the coming months due to a solid job market that is encouraging sales.

The July-September quarter saw the economy expand at a sound annual rate of 3.3 percent. Despite this being the best economic growth in three years, residential construction dropped for the second quarter in a row. Still, economists are optimistic that October’s low 4.1 percent unemployment rate will bring about a stable resurgence in both sales and construction.

Last year, the construction industry made its largest contribution to the economy since 2009. A report from the American Builders and Contractors showed that 6.2 percent of U.S. gross domestic product came from investment in construction, both residential and nonresidential, in 2016. Construction revenue is a chief component in how much the industry has contributed to the U.S. economy in the last seven years.