
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, May 3, 1994                   TAG: 9405030166
SECTION: BUSINESS                    PAGE: C-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

CONSTRUCTION SPENDING ROSE IN MARCH

Spending on construction projects, held down the first two months of the year by unusually harsh winter weather, rebounded in March.

The Commerce Department reported Monday that construction spending rose 0.8 percent in March, with a jump in commercial work more than offsetting a drop in government construction. Spending on home building also rose, despite mortgage rates that have gone up since hitting a 25-year low last fall.

``Construction is goingvery was weaker than expected, a bigger gain is likely during the second quarter of the year. Many analysts had predicted a 2 percent rise in construction spending.

In another report, the National Association of Purchasing Management, a trade group of buyers for the nation's factories, said American manufacturing strengthened in April for the eighth straight month.

The widely followed economic survey was stronger than expected and suggested the overall economy is becoming more robust. The purchasing managers index, calculated from survey results, rose to 57.7 percent, compared to 56.7 percent in March. Any reading exceeding 50 percent indicates an expansion of the manufacturing economy.

The Commerce Department said residential, non-residential and government spending totaled $495.4 billion in March, up from $491.7 billion in February. Spending was down 1 percent in February and 2.3 percent in January after increasing for each of the previous eight months.

In March, government spending declined 2.7 percent, to $126.9 billion, after slipping 0.3 percent in February.

Spending on home building rose 1.5 percent in March, to $234.4 billion, after increasing 0.3 percent in February and 0.4 percent in January. With revised figures for January - which previously had shown the category unchanged - residential construction has increased 11 straight months.Thirty-year, fixed-rate mortgages averaged 8.32 percent last week, according to the Federal Home Loan Mortgage Corp.

Spending on apartment buildings was up 1.8 percent in March, the third straight increase.

Non-residential spending rebounded sharply in March, rising 3.8 percent to $92.7 billion after a 5.1 percent drop in February. Leading the way was spending on commercial property, such as shopping centers, which rose 5.8 percent, and office buildings, which increased 9.1 percent after dropping 5.3 percent in February.

by CNB