Construction, manufacturing increasing at rapid rate
Posted on Tuesday, September 3, 2013 at 12:18:19 PM
As many borrowers are using residential financing to buy properties, construction spending grew over the month of July, exceeding expectations while being fueled by expectations for new homes.
This year was a strong one for both construction and manufacturing, and the overall pace is faster than many leading economists predicted, according to Bloomberg. Factory activity is on the rise, with some credit going to high demand for automobiles and residential construction.
"It's going to be a solid quarter for U.S. manufacturing," Brian Jones, senior economist at Societe Generale, told the news source. "Businesses are expanding production not only to meet demand but to also build inventories. Foreign demand may be picking up."
Additionally, private construction spending reached a seasonally adjusted annual rate of more than $631 billion, according to the Commerce Department. Specifically, residential construction accounted for more than $334 billion for the month, 0.6 percent greater than June's revised estimate.
Spending on new single family homes was more than 29 percent higher for July 2013 than it was for the same time last year, while new multi-family homes was greater than 39 percent year-over-year.
A number of factors contribute to a stronger housing market, and more people using residential financing may help increase construction demand and keep the positive trend.