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US construction spending continues to rise

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US construction spending has risen for a seventh consecutive month, figures have revealed

The Department of Commerce announced that investment was at a seasonally adjusted annualised rate of £540 billion in October 2012.

This was up 1.4 per cent from the rate in September, while revisions to earlier estimates showed a smooth upward trend since March.

Spending in October 2012 was almost 10 per cent above that in the same month last year, giving real grounds for optimism.

It comes after the American Institute of Architects’ Architecture Billings Index hit 52.8 in October, its highest reading since December 2010.

Housebuilding continued to lead the recovery, accounting for more than a third of total construction investment in October 2012.

Residential spending was up 3 per cent from the previous month and almost 20 per cent year-on-year.

The Royal Institution of Chartered Surveyors said the housing market was set for further growth.

RICS economist Himanshu Wani said: ‘The combination of increasing sales, rising prices and low inventories is a potent combination for encouraging homebuilding activity.’

Private construction grew 1.6 per cent in October, and now accounts for two-thirds of construction spending in the US. Public spending grew just 0.8 per cent.

But the biggest sub-sector rise was in public commercial work, which rose 9.9 per cent from September.

The greatest fall was in private communications building, which shrunk 6.5 per cent.

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