WASHINGTON -- U.S. builders increased their spending on construction projects in October by the largest amount in five months, led by a surge in housing.
The Commerce Department said Monday that construction spending rose 1.4 percent in October. It was the largest gain since a 1.7 percent increase in May.
The increase raised spending to a seasonally adjusted annual rate of $872.1 billion. That is nearly 17 percent higher than a 12-year low hit in February 2011.
Sales of new homes fell slightly in October, dragged lower by steep declines in the Northeast partly related to Superstorm Sandy. New-home sales were still 17 percent higher in October than the same month a year ago.
The strong 3 percent increase in housing construction spending in October left the rate of annual spending 19 percent above the level of October 2011.
Government construction spending barely rose, to a level that’s still below its rate of a year ago. Public projects have been under stress because of budget problems at all levels of government.