This July, construction spending in the US, rose to the highest level in over seven years, indicating strong economic momentum, while providing another sign that the housing market can help reinforce economic growth in the midst of volatility in the global markets.
Total construction spending surged 0.7% from the previous month to $1.083 trillion, the Commerce Department reported. This is the highest level of construction spending since May 2008.
The results announced by the Commerce Department suggest that businesses are confident in the economy to expand. Activity in the construction sector is expected to support the overall economy for the remainder of the year.
Private construction spending surged by 1.3 percent to reach its highest level since April 2008, while private non-residential construction rose 1.5 percent.
Employment in the US construction industry also surged, in spite of the dismal jobs report for the overall economy. In September, construction jobs increased by 8,000, with trade contractors and non-residential builders representing 6,800 of those jobs.
With the release of the report, analysts at Barclays have forecasted the US economy to grow 2.6 percent in the third quarter.