WASHINGTON (AP) — Spending on U.S. construction projects fell 1.1 percent in June, the biggest decline in more than a year as spending on public construction dropped at the highest rate in more than five years.
The decline in June brought total construction spending to a seasonally-adjusted $1.32 trillion, 6.1 percent higher than a year ago, the Commerce Department said. June’s decline was partly offset by an upward revision of May’s figure to 1.3 percent from 0.4 percent.
Despite the June declines, analysts expect construction spending to contribute to overall growth in the economy this year, particularly as the market for existing homes remains tight.
Government spending on construction projects fell 3.5 percent in June, the biggest decline since March of 2013, when it also dropped 3.5 percent. The last time government spending on construction projects dropped more than that was in November of 2003, when it fell 3.6 percent.
Government spending on school construction fell by 11 percent, while spending on power plant projects dropped by 9.5 percent.
Spending on private residential projects fell 0.5 percent in June, with the volatile apartment building sector seeing a 2.8 percent decline.
Last month, the Commerce Department reported that June housing starts had plummeted 12.3 from the previous month, although through the first half of 2018, new home construction has climbed 7.8 percent year-to-date. Analysts expect continued strength in home construction, driven by a healthy job market and shortage of existing homes for sale.
Published at Wed, 01 Aug 2018 14:32:24 +0000