Construction spending in the United States recorded a major gain in the month of May, thrusting the overall activity to the peak point since the fall of 2008. The gain was led by a massive spike in non-residential projects.
The total spending on construction rose 0.8 per cent in May, after an even higher 2.1 per cent rise in April, according to the Commerce Department. The gains boosted overall activity to an annual rate of US$ 1.04 trillion, which is the highest level since 2008 in the month of October.
All chief categories reported a rise in May, driven by a 1.5 per cent hike in non-residential projects, which showed a rise in spending on manufacturing facilities, hotels, and amusement parks. Residential construction increased by a more humble 0.3 per cent. Spending on government projects, on the other hand, was up by 0.7 per cent.
Construction activity in the country is anticipated to be a major source of strength in 2015, supporting and accelerating the US economy after a slow period at the start of this year.
The 0.3 per cent hike in residential projects equaled the gain in April and was driven by a rise of 0.9 per cent in renovation projects spending. Spending on apartment projects rose 0.2 per cent while spending on single family houses was reportedly flat in the month of May. The 1.5 per cent spike in construction of non-residential projects came after sizable gains of 3.3 per cent in March and 4 per cent in April. There was a 0.7 per cent rise in spending on government projects; spending on state and local building projects reported a small 0.2 per cent surge while federal level projects reported a 6.3 per cent advance.
Market analysts have said that both the residential and commercial real estate markets seem to be stronger this year.