Nonresidential construction spending expanded strongly in July, growing 2.5 percent on a monthly basis and spiking 8.6 percent on a year-over-year basis, according to the U.S. Census Bureau. Spending for the month totaled $617.8 billion on a seasonally adjusted, annualized basis.

“Today’s encouraging report provides further evidence that a vigorous nonresidential construction recovery is finally at hand,” says Associated Builders and Contractors chief economist Anirban Basu. “Increased job growth, booming energy production, expanding industrial production and normalizing capital markets are all contributing to nonresidential construction’s renewed momentum, and confidence among developers and other significant consumers of construction services is high, signaling ongoing recovery.”

All major categories of construction spending increased in July, and total construction reached the highest level since December 2008, according to the Associated General Contractors of America (AGC).

Construction spending in July totaled $981 billion at a seasonally adjusted annual rate, up 1.8 percent from the June total. The July total was 8.2 percent higher than in July 2013. Private nonresidential spending increased 2.1 percent from June and 14 percent from a year earlier, while private residential spending grew 0.7 percent for the month and 8.0 percent year-over-year.

“It is encouraging to see signs of a broad-based recovery in private construction along with a recovery—at least for now—in public construction investment,” says Ken Simonson, AGC chief economist. “Private nonresidential construction should remain strong through the rest of 2014 and beyond, while residential spending is likely to keep growing, though at a more moderate pace. However, funding is still inadequate for needed public infrastructure improvements.”

Public construction spending rose 3.0 percent from June to July and 2.1 percent year-over-year, though public construction for the first seven months of 2014 combined remained 0.1 percent below the total for the same period in 2013.

“The largest private nonresidential categories showed robust year-over-year growth, as did both single- and multifamily housing,” says Simonson. “The dominant public segments—highway and educational construction—also did well in July, though their performance has been mixed year-to-date.”