In this Saturday, July 8, 2017, photo, construction cranes loom over the Georgetown neighborhood in Washington. On Friday, Sept. 1, 2017, the Commerce Department reports on U.S. construction spending in July. (AP Photo/J. David Ake)
September 01, 2017 - 7:21 AM
WASHINGTON - U.S. construction spending fell in July for the third time in four months as strength in home construction wasn't enough to offset weakness in nonresidential building and government projects.
Construction spending dropped 0.6 per cent in July following an even bigger 1.4 per cent decline in June, the Commerce Department said Friday. Spending on home construction rose 0.8 per cent as single-family homes and remodeling offset a drop in apartments.
Spending on nonresidential projects fell for a second straight month, declining 1.9 per cent. Spending on government projects fell 1.4 per cent.
With the recent weakness, construction spending is only 1.8 per cent higher than a year ago at a seasonally adjusted annual rate of $1.21 trillion. Analysts expect construction will provide modest support for the overall economy in the months ahead.
The fall in nonresidential activity in July was the biggest setback in nearly two years, since a 2.1 per cent decline in October 2015. In July, spending on offices, shopping centres and hotels all declined.
Spending on government construction projects was down 1.2 per cent at the federal level and 1.4 per cent at the state and local level.
The government reported earlier this week that the overall economy grew at a brisk 3 per cent pace in the April-June quarter, up from a lacklustre 1.2 per cent gain in the first quarter, as measured by the gross domestic product.
However, spending on residential construction actually fell at a 6.8 per cent rate in the spring following a sizable 11.1 per cent gain in the first quarter. Economists believe the spring slowdown in home building was in part a payback after unusually warm weather had boosted activity in the winter.
News from © The Associated Press, 2017