Construction Spending Increases In March

For five months, the amount of money spent on construction in the U.S. declined. But the Commerce Department said Monday that construction spending increased slightly in March.

Copyright © 2009 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

RENEE MONTAGNE, host:

The money spent on construction in the U.S. rose last month, according to the commerce department. Yesterday's report came as a welcome surprise after five months of decline. But it's not necessarily a sign that economic good times will be back anytime soon. NPR's Jeff Brady reports.

JEFF BRADY: There's only a 0.3 percent increase, but considering recent history, any improvement is worth noting. But don't get too excited. Economist Patrick Newport with IHS Global Insight calls the numbers an aberration.

Mr. PATRICK NEWPORT (IHS Global Insight): You shouldn't read too much into them. The recent numbers have been awful and they're gonna continue to be awful.

BRADY: The increase is due to two things. First, the government spent more money building schools and the like. But Newport says states can't sustain that because of their budget problems, and it'll take some time for stimulus projects to get going. Second is business construction. Newport says there were a couple of big refinery construction jobs that made the numbers look good for now, but that won't continue. And he says there are other projects that already were in the works before the economy turned.

Mr. NEWPORT: There's just simply been too much that we're building in that sector, and there's also been a price bubble that has been nearly as large as the housing price bubble.

BRADY: But Newport does have one bit of good news in these numbers. They're likely to improve gross domestic product, but just slightly. That number will still be down nearly six percent.

Jeff Brady, NPR News.

Copyright © 2009 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.