US construction spending rose more than expected in May, as a severe shortage of homes for sale boosted spending on single-family homes.
The Commerce Department said Monday that construction spending rose 0.9% after rising 0.4% in April.
Economists polled by Reuters had expected construction spending to rise 0.6%. Construction spending advanced 2.4% year-on-year in May.
Spending on private construction projects rose 1.1%, with residential construction investment rebounding 2.2% after falling 0.9% the previous month. Private construction spending had risen 0.4% in April. Spending on single-family housing projects accelerated 1.7% in May.
Although the housing market has been hit hardest by the most rapid-tightening cycle of Federal Reserve monetary policy since the 1980s, the acute shortage of available single-family homes for sale is fueling construction. Home construction skyrocketed in May.
The construction spending report showed spending on multi-family housing projects fell 0.1% in May.
Spending on private non-residential structures, such as oil and gas well drilling, fell 0.3%.
Spending on public construction projects rose 0.1% after rising 0.5% in April. State and local government spending increased by 0.4%, while federal government spending fell by 2.5%.
Connect with the Voice of America! Subscribe to our channel Youtube and activate notifications, or follow us on social networks: Facebook, Twitter and Instagram.
