Posted: Tuesday, September 2nd 2014 at 1:16pm
US manufacturing grows at fastest pace in 3 1/2 years; construction spending up
By The Associated Press
WASHINGTON (AP) -- U.S. manufacturing grew in August at the strongest pace in more than three years as factories cranked out more goods and new orders rose - and construction spending was up 1.8 percent in July.
The Institute for Supply Management's manufacturing index rose to 59 from 57.1 in July, the ISM said Tuesday. That was the highest reading since March 2011. Any measure above 50 signals that manufacturing is growing.
Tuesday's ISM report coincides with other signs that manufacturing is helping drive the U.S. economy's improvement. Factories are benefiting from strong demand for aircraft, furniture, and steel and other metals. The boost from manufacturing has helped offset slower homebuilding, a slowdown in consumer purchases and weaker spending on utilities and other services.
Construction spending up 1.8 percent in July
U.S. construction spending staged a strong rebound in July, rising by the largest amount in more than two years. All major categories of construction showed gains in an encouraging sign that spending on building projects will help boost the economy in the second half of this year.
Construction spending rose 1.8 percent in July, the biggest one-month gain since May 2012, the Commerce Department reported Tuesday. It followed a 0.9 percent decline in June, the largest setback in a year. That decline had been blamed in part on soggy weather which depressed construction activity in many parts of the country.
The July rebound pushed total construction to a seasonally adjusted annual rate of $981.3 billion, the highest level since December 2008. Spending on housing, non-residential and government projects all increased.
Construction spend is now 8.2 percent higher than it was a year ago as it continues to advance following a deep plunge during the Great Recession when builders sharply cut back because of a glut of unsold homes.
Housing construction was up 0.7 percent in July to an annual rate of $358.1 billion after two months of declines. Spending on single-family homes rose 0.5 percent and is 9.4 percent higher than a year ago while apartment construction rose 0.2 percent and is 41 percent higher than a year ago.
Spending on non-residential projects increased 2.1 percent to an annual rate of $343.6 billion with the strength led by gains in hotel construction, electric power transmission and manufacturing.
Spending on government projects rose 3 percent, the largest gain since October. Spending on state and local projects was up 3.4 percent, offsetting a 1.1 percent drop in federal construction spending.
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