Construction Spending Increases In March
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.
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