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US construction spending posts biggest drop in more than a year
[WASHINGTON] US construction spending recorded its biggest drop in more than a year in June as investment in both private and public projects fell, but spending for the prior months was revised sharply higher.
The Commerce Department said on Wednesday that construction spending fell 1.1 per cent, the largest decline since April 2017. Data for May was revised up to show construction outlays rising 1.3 per cent instead of the previously reported 0.4 per cent gain.
April's outlays were also revised up to show them increasing 1.7 per cent instead of 0.9 per cent.
Economists polled by Reuters had forecast that construction spending would advance 0.3 per cent in June. Construction spending accelerated 6.1 per cent on a year-on-year basis.
Spending on private residential projects fell 0.5 per cent in June following a 1.3 per cent increase in May. Homebuilding has been slowing, with builders citing rising material costs as well as persistent land and labor shortages. Residential investment contracted in the first half of the year.
Spending on private nonresidential structures slipped 0.3 per cent in June after gaining 0.2 per cent in the prior month. Overall, outlays on private construction projects fell 0.4 per cent in June after increasing 0.9 per cent in May.
Investment in public construction projects tumbled 3.5 per cent, the biggest drop since March 2013, after surging 3.0 per cent in May. Spending on federal government construction projects declined 3.1 per cent. That followed a 0.9 per cent increase in May.
State and local government construction outlays plunged 3.5 per cent in June, also the largest drop since March 2013, after jumping 3.1 per cent in the prior month.