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U.S. construction spending hits post-recession high

Photo: Leila Navidi/Star Tribune, June 2, 2015.

Photo: Leila Navidi/Star Tribune, June 2, 2015.

U.S. construction spending hit a new post-recession high in July, reinforcing the industry's position as a pillar of the economy.

Total construction activity rose in July to a seasonally adjusted rate of $1.08 trillion, a 0.7 percent increase from the revised June spending of $1.07 trillion, according to data released Tuesday by the U.S. Census Bureau.

While month-to-month construction spending can be unreliable for drawing longterm trend, the growth has been consistent throughout the year. Actual spending in the first seven months of 2015 grew 9.3 percent compared to the same period in 2014. This is the highest level in more than seven years.

The Commerce Department data captures the cost of labor, materials, architectural and engineering work, interest and taxes, overhead costs and contractors' profits.

Private nonresidential construction led the way, accounting for $407 billion in activity -- a 1.5 percent change over the revised June estimate and more than 18 percent over the same month last year. Private residential, which includes multifamily complexes and single-family homes, rose 1.1 percent compared to the revised June estimate and by 15.6 percent compared to July 2014.

Total public spending dropped in July by 1 percent, but has increased 6 percent during the first seven months of 2015 compared to the same period last year. 

In the past 12 months, total construction spending has risen 13.7 percent. 

Home builders in the Twin Cities score an August uptick

A raft of planned new apartment buildings helped boost homebuilding in the Twin Cities metro this month. During August, 470 permits to build 739 units were issued during the four-week period ending August 27, according to data gathered by the Keystone Report for the Builders Association of the Twin Cities (BATC). That was a 13.8 percent increase in permits and a 38.9 percent increase in the number of new units.

Despite two consecutive months of stronger permit activity, including a recent spike in single-family construction, home building in the region has been flat compared with last year. Here's a response to the situation from BATC president, Chris Contreras: “While we’re happy to see another month of improvement in the market, we were hoping for a much stronger year in 2015."

These communities issued the most permits last month:

  1. Minnetonka: 107
  2. Carver: 69
  3. Ramsey: 52
  4. Plymouth: 38
  5. Woodbury: 37