Construction spending in Japan set to grow at highest pace in 23 yrs

Construction spending in Japan is expected to surge 11.2 percent to 49.95 trillion yen in the current fiscal year through March, the fastest growth in 23 years, the government said Friday.

The big increase is attributable to a supplementary budget for last fiscal year that Prime Minister Shinzo Abe and his Cabinet compiled to stimulate the economy.

Forecast construction spending in fiscal 2013 is the highest since FY 2006 and includes 21.96 trillion yen in government spending, up 16.4 percent. That includes spending on reconstruction after the March 2011 earthquake and tsunami and other public works.

The government spending includes 5.4 trillion yen under the fiscal 2012 supplementary budget, which is expected to boost Japan's real gross domestic product by about 1.1 percent and create 763,000 jobs.

In fiscal 2013, private sector construction spending is estimated to increase 7.5 percent to 27.99 trillion yen, including 14.89 trillion yen in residential investment, up 6.5 percent.