Construction spending up but pace is still weak

AP News
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Posted: Oct 03, 2011 10:12 AM
Construction spending up but pace is still weak

U.S. builders increased spending on homes, office buildings and other projects in August after a big decline in July. The gain still left the construction industry far below levels considered healthy.

The Commerce Department says construction spending rose 1.4 percent in August after a 1.4 percent decline in July, which had been the biggest setback in six months. The increase pushed construction activity to a seasonally adjusted annual rate of $799.1 billion. That's 4.8 percent above an 11-year low hit in March. But it's barely more than half the $1.5 trillion pace considered healthy.

Analysts say it could be four years before construction returns to healthy levels. A dismal outlook for housing and a weak economy have forced governments to cut back on building plans.