Construction Spending Up Slightly : Tiny Rise in Construction Spending Offers Hope for End of Long Slump

Construction spending showed a small increase in July, the government said today in a report that provided some evidence that a slump in the building industry may be coming to an end.

The Commerce Department said the spending inched up a tiny 0.02%, rising $100 million to a seasonally adjusted annual rate of $415.7 billion in July. The increase followed a decline of 0.9% in June.

While the rebound was only slight, analysts said it offered at least the hope that the lengthy construction slump may be bottoming out, especially given the fact that recent declines in mortgage rates have bolstered sales of new single-family homes.

In July, residential construction edged down 0.2%, with single-family homes dipping 0.1% and multifamily buildings down 1.7%. Non-residential construction rose during the month by 0.9%. The advance was paced by a giant 3.1% increase in factory construction.