WASHINGTON – Spending on U.S. construction projects rose in August to the highest point in more than seven years, fueled by home building and government projects.

The Commerce Department says construction spending in August increased 0.7 percent from July, when spending had risen 0.4 percent. Construction activity rose to a seasonally adjusted annual rate of $1.09 trillion, the highest level since May 2008.

The gains were led by gains of 1.3 percent in home building and 0.5 percent in government construction projects.

Private nonresidential construction also advanced, but by a more modest 0.2 percent. Two key areas – office building and the category that covers shopping centers – both declined.

Construction activity is expected to provide solid support for the overall economy for the rest of the year.