Construction spending rises for the second straight month

Builders slightly increased their spending in September for the second straight month, driven by an increase in residential construction, while spending on government projects fell. 

Construction spending was up 0.2 percent in September, following a 1.6 percent increase in August, to a seasonally adjusted annual rate of $787.2 billion, the Commerce Department said Tuesday. 

The September figure is 1.3 percent below the September 2010 estimate of $797.3 billion.

During the first nine months of this year, construction spending amounted to $580.9 billion, 3.5 percent below the $602.0 billion for the same period last year and well below the $1.5 trillion economists say represents a healthy spending level. 

Spending on private construction — single-family and multi-family units — was at a seasonally adjusted annual rate of $501.8 billion, up 0.6 percent over the revised August estimate of $499 billion. 

Through the housing crisis renting has become more popular, leading to a resurgence in spending on that type of housing. 

Residential construction was at a seasonally adjusted annual rate of $228.3 billion in September, 0.9 percent above August's revised $226.3 billion. 

Nonresidential construction was at $273.5 billion in September, 0.3 percent above August's revised estimate of $272.8 billion.

Meanwhile, public construction projects, include schools, roads and government offices, fell 0.6 percent in September to $285.4 billion from the revised August estimate of $287 billion. 

Educational construction was $73.3 billion, 0.9 percent below August estimates of $73.9 billion. Highway construction amounted to $80.3 billion, 1.4 percent above the revised August estimate of $79.2 billion.

Facing austere fiscal conditions, state and local governments have cut spending.