U.S. construction spending rose by 0.9 percent in May, the biggest gain in nearly one and a half years, the Commerce Department reported Friday.

The gain pushed construction spending in May up to a seasonally adjusted annual rate of 1.177 trillion dollars. Still, it was 2.8 percent below the year-ago level.

During the first five months of this year, construction spending amounted to 442.1 billion dollars, 3.9 percent below the 460.1 billion dollars for the same period in 2006.

The report showed that spending on private construction rose by 0.5 percent in May to an annual rate of 892.1 billion dollars. Of that, residential construction fell by 0.8 percent to an annual rate of 549.0 billion dollars.

Private nonresidential construction, however, was up 2.7 percent to an annual rate of 343.1 billion dollars, hitting an all-time high.

Meanwhile, spending on public construction increased by 2.2 percent in May to an annual rate of 284.5 billion dollars, also setting a record.

Spending on educational construction by the government was at an annual rate of 79.7 billion dollars, up 0.7 percent from the previous month. Highway construction spending also climbed up by 0.5 percent to 76.4 billion dollars.

The 0.9 percent increase was much stronger than the 0.2 percent gain expected by analysts for May.

Source: Xinhua