US Construction Spending Fell 1.1% in June
WASHINGTON — Spending on U.S. construction projects fell 1.1% 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% 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% from 0.4%.
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% in June, the biggest decline since March 2013, when it also dropped 3.%. The last time government spending on construction projects dropped more than that was in November 2003, when it fell 3.6%.
Government spending on school construction fell by 11%, while spending on power plant projects dropped by 9.5%.
Spending on private residential projects fell 0.5% in June, with the volatile apartment building sector seeing a 2.8% 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% year-to-date. Analysts expect continued strength in home construction, driven by a healthy job market and shortage of existing homes for sale.