U.S. construction spending jumped in October, fueled by solid gains in home building and the largest increase in federal construction in nearly nine years.
The Commerce Department said Tuesday that construction spending rose 1 percent in October from the previous month to a seasonally adjusted annual rate of more than $1.1 trillion. That's the highest level since December 2007, when the Great Recession began.
More Americans are buying new homes or renting apartments, driving greater residential development. And federal, state and local governments, spurred partly by greater tax revenue, are building more roads and schools. Construction spending has increased 13 percent in the past 12 months.
The construction of single-family homes and apartments climbed 1 percent in October, also reaching their highest level since December 2007. Manufacturers boosted their construction spending by 3 percent. And federal government building soared 19.2 percent, the biggest increase since October 2006.
Americans are staying in rental apartments for longer, rather than buying a home. That spurred a nearly 28 percent jump in apartment and condo construction in October from a year earlier. Nearly a third of buildings completed so far this year were apartments and condos, compared to just 27 percent before the recession began in late 2007.
At the same time, low mortgage rates and three years of solid job gains have boosted home sales, including purchases of new homes, which have jumped more than 15 percent year-to-date compared with last year.
That boosted construction spending on single-family homes 1.6 percent in October and 11.4 percent in the past year.
Public construction of schools, highways and other infrastructure rose 1.4 percent in October to its highest level in five years. It has risen 6.6 percent in the last 12 months.