WASHINGTON — Construction spending rose 0.3 percent in June. According to AP, the increase was unexpected by analysts who had estimated a 0.5 percent drop. The increase in spending was attributed to an increase in residential building, which rose by 0.5 percent and government-funded infrastructure projects, which rose by 1 percent, in part due to the $787 billion stimulus package.
“It’s reasonable to expect that…some of that spending is related to stimulus money,” said Zach Pandl, an economist at Momura Securities Intl. “Public sector spending should gain momentum over the next several months as new projects are rolled out,” according to AP.
This report follows recent good economic news, including a lower than expected 1 percent contraction of the GDP, an 11 percent increase in new home sales in June and the Institute for Supply Management, a key manufacturing index, indicated that the sector is contracting at a slower rate.
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