Construction spending reaches all-time high.

National construction spending hit an all-line high in September, which may mean a bumper 2004 for the industry, say some experts.

According to the U.S. Commerce Department, the total amount spent on construction projects in September rose for the fourth month in a row, to a third straight record of $910 billion. That was 1.3% above the August total of $899 billion and for the first nine months of 2003, spending totaled 3.1% more than in January-September 2002.

"Construction put in place showed amazing strength in September," said Kenneth D. Simonson, chief economist for the Associated General Contractors of America. "For a change, private nonresidential construction led the growth parade, while housing and public construction set monthly records."

Additional good news was that previous months spending have also been adjusted upward. July was revised from $881 billion $893 billion and August's total went from $883 billion to $899 billion.

"I think the strong September figures and upward revisions for July and August mean gross domestic product for the third quarter may have grown even more steeply than the 7.2% rate reported last week."

"Although I expect GDP and construction to slow in the fourth quarter, the great third-quarter figures give me hope that both public and private nonresidential construction will do better in 2004 than I had been predicting."

The largest growth was in private residential spending, which achieved a third consecutive record in September, rising 1.4% form August.

This was a unexpected.

"With mortgage rates now drifting down again after the brief upturn in the summer, I think housing construction will stay strong," he said.

"Even multi-family construction, which I expected would slump, is up 3% through the first nine months of 2003 compared to the same period of 2002, while single-family construction has posted a 13% gain."

However, some experts say the single-family and multi-family construction spending may be artificially driving those figures and with the economic indicators pointing to a sluggish 2004 predictions at this point may not be accurate. "My opinion is its too early to tell. The figures have to treated with an element of caution and you have to look into sector and look beneath the overall trends," said Allastair Lamb, vice president of Currie and Brown and member of RICS, a non-profit organization that studies land, property, construction and associated environmental issues.

There has been some "signs of life" in the construction industry such as the New York Times building and the Durst Organization and Bank of America building in Times Square, as well as several projects in the hotel industry and public school construction in the tri-state area, Lamb said.