Commercial construction activity, a key indicator of economic growth,was up 36 percent in the Washington area during the third quarter, the Metropolitan Washington Council of Governments announced last week.

Commercial development, led by office construction, increased by 2 million square feet over the same period last year, aCOG report said.

Building was started or contracts were awarded on 144 major projects from July through September. The new developments cost $384 million and totaled 7.8 million square feet.

Northern Virginia continued to lead the area with 44 percent of total new construction. Seventy-nine new commercial projects worth $107 million and totaling 3.4 million square feet were started.

New construction projects in the District were up a sharp 74 percent for the quarter. Eleven new projects totaling $120 million will add 2.5 million square feet of commercial space to the city.

In suburban Maryland, 54 projects totaling 1.9 million square feet were added at a cost of $157 million.

Office construction dominated the figures. Offices accounted for 4.1 million square feet of the completed space, more than half the total square footage added. The 41 projects started during the third quarter cost an estimated $174 million.

The largest increase in development was among hotels and motels. Five new projects, totaling 1.7 million square feet, were started at a cost of $29.2 million. By comparison, in the second quarter just one such project was started, and it totaled just 33,000 square feet.

Thirty-seven new retail projects were started totaling 496,000 square feet.

Finally, fewer commercial projects were deferred or abandoned than in the previous four quarters. Construction was halted or abandoned on 11 sites, well below the quarterly average of 24, the COG report said.