Dive Brief:
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Construction spending rose 1.1% between September and October—the largest gain since May, the Census Bureau reported on Tuesday.
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A 1% increase in nonresidential spending was fueled by the building of schools and other projects funded by state and federal governments.
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Residential construction spending was up by a collective 1.3% in all sectors-- including single- and multifamily homes and renovations—during the same period.
Dive Insight:
Industry analysts cautiously embraced the good news.
A 2.3% surge of government spending on schools and other facilities is the biggest since October 2006, Reuters reported. And the news serviced quoted one manufacturer as saying local and state governments "are healthier than they have been in the past,” which could mean more spending in the coming months.
But the positive month for residential spending, including a 1.8% boost in the single-family sector, is tempered by a year of weak gains in the industry.
"The October rebound does not undo the damage" from a slowdown that began last winter, economist Ian Shepherdson of Pantheon Macroeconomics told the Associated Press.