Government Paces Building Spending Rise of 1.3% in May

Construction spending, continuing to be led by an increase in work on government projects, rose 1.3% in May, the government reported today.

The Commerce Department reported that spending on both public and private construction rose to a seasonally adjusted $421.3 billion in May, following a 0.8% drop in April and a 0.2% rise in March.

While public construction rose 6.7% in May to $86.2 billion, private construction remained flat at a seasonally adjusted annual rate of $335.1 billion, the department said. Private construction had fallen 1.6% in March.

The construction industry has been among the sectors of the economy hardest hit recently by the Federal Reserve’s campaign to halt inflation by tightening credit and thus boosting interest rates.

May’s spending level was 3.3% above the pace in May, 1988.

Spending on private, non-residential construction projects rose 2.6% in May to an annual rate of $98.7 billion. But construction of new housing units remained flat at an annual rate of $335.1 billion.