The construction industry posted a slight gain in May as companies and the government increased spending on projects across the U.S.
Spending on construction projects rose 0.9% in May to $1.93 trillion, the Commerce Department reported Monday.
Wall Street was expecting construction spending to rise 0.5% in April.
Construction spending reveals how much the government and private companies spend on projects, from housing to highways. The more the U.S. spends on construction, the higher the level of economic activity.
The government revised spending on construction in April to 0.4% from an initial read of a 1.2% increase.
Over the past year, construction spending was up 2.4%.
In terms of residential real estate, private residential construction fell 11.6% in May as compared to the previous year. It was up 2.2% as compared to April.
Single-family construction rose on a month-over-month basis in May by 1.7%, but fell sharply by 25% from last year.
Multifamily construction fell by 0.1% in May, but increased by 20.4% from last year.
Spending on public residential construction rose by 0.1% from last month, and 12.3% from last year. The U.S. increased spending on public residential construction by 1.1% from last month, and 8.3% over the last year.
The increase in spending May overall was “strong,” Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets, wrote in a note.
“In particular, new residential activity jumped by 2.2%, reversing the cumulative declines recorded over the three prior months,” he added. “This lines up with the big increase in housing starts in May and adds to the growing body of evidence that the housing sector is bottoming out.”
Stocks
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were down in early trading on Monday. The 10-year Treasury note
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