In this Thursday, Aug. 25, 2016, photo, workers continue construction on a high-rise condominium project on Biscayne Boulevard, in downtown Miami. On Monday, Oct. 3, 2016, the Commerce Department reports on U.S. construction spending for August. (AP Photo/Alan Diaz)
Republished October 03, 2016 - 9:39 AM
Original Publication Date October 03, 2016 - 7:10 AM
WASHINGTON - U.S. builders trimmed spending on construction projects in August for a second straight month with housing, non-residential and government activity all seeing declines.
Construction spending dropped 0.7 per cent in August after a 0.3 per cent slip in July, the Commerce Department reported Monday. It was the third decline in the past five months.
Residential construction decreased 0.3 per cent, while non-residential activity was down 0.4 per cent. Spending on government projects fell 2 per cent, dragged down by a sharp drop in activity at the state and local level. That has fallen to the lowest point since March 2014.
Economists believe that the slowdown in construction will be temporary, with ultra-low interest rates and a growing economy prompting greater building activity in coming months.
"While demand for construction remains robust, it is no longer growing like it was earlier this year," said Ken Simonson, chief economist for the Associated General Contractors of America.
Simonson said the building industry could get a welcome boost if government policymakers moved to upgrade "our aging infrastructure."
Construction spending totalled $1.14 trillion in August at a seasonally adjusted annual rate, down 0.3 per cent from the level in August 2015.
The strongest sector over the past year has been non-residential activity, which is up 4.2 per cent from a year ago, followed by residential construction, which has risen 1.4 per cent. By contrast, total public construction is down 8.8 per cent from the level 12 months ago, reflecting a squeeze on spending from efforts to control budget deficits at all levels of government.
For August, the decline in home building reflected a 0.9 per cent drop in the construction of single-family homes, which offset a 2.4 per cent increase in apartment construction.
In the non-residential categories, office building and spending on hotels were both up in August. Spending in the category that includes shopping centres declined.
News from © The Associated Press, 2016