Analysis and discussion of issues that impact business

This is good news for building contractors. Bad news for the speculators!

Spending on construction projects unexpectedly edged up in August as the best gain in nonresidential activity in 11 months offset another big decline in home building.

It looks like things are looking up.

 Even though home construction is still struggling, this is a good counterbalance.

The Commerce Department reported that construction spending rose by 0.3 percent to a seasonally adjusted annual rate of $1.20 trillion. It followed a huge 1 percent decline in July and represented the best showing in five months.

 The breakdown of the numbers is interesting.

Analysts had been forecasting construction spending would drop in August, reflecting continued weakness in residential construction. However, a big drop in residential activity was offset by strength in office building and other nonresidential projects. Spending by state and local governments also rose.

Big increases in private construction included an 8.2 percent jump in spending to build factories, a 4.8 percent rise in spending on amusement parks, a 3.1 percent rise in office building and a 1.8 percent increase in hotel and motel construction.

And you can toss in shopping centers. But your local politicians might be helping out too.

The 1.4 percent rise in state and local government projects followed a 1.5 percent drop in that category last month.

The 4.3 percent fall in spending on federal projects was the biggest setback since last April.

So, as the northern construction season starts to slow, we'll see what next month's numbers look like.