Construction Spending Up But Pace Is Still Weak

By MARTIN CRUTSINGER | October 3, 2011 | 10:15 AM EDT

In this photo taken July 15, 2011, carpenters work to enclose a roof on a home being built in Springfield, Ill. (AP Photo/Seth Perlman)

Washington (AP) — U.S. builders increased spending on homes, office buildings and other projects in August after a big decline in July. The gain still left the construction industry far below levels considered healthy.

The Commerce Department says construction spending rose 1.4 percent in August after a 1.4 percent decline in July, which had been the biggest setback in six months. The increase pushed construction activity to a seasonally adjusted annual rate of $799.1 billion. That's 4.8 percent above an 11-year low hit in March. But it's barely more than half the $1.5 trillion pace considered healthy.

Analysts say it could be four years before construction returns to healthy levels. A dismal outlook for housing and a weak economy have forced governments to cut back on building plans.