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US construction spending unexpectedly falls in September
[WASHINGTON] US construction spending unexpectedly fell in September as outlays on private nonresidential structures recorded their biggest decline in nine months, which could see a mild downward revision to the third-quarter economic growth estimate.
The Commerce Department said on Tuesday that construction spending slipped 0.4 per cent after an upwardly revised 0.5 per cent drop in August. Construction outlays were down 0.2 per cent from a year ago.
Economists polled by Reuters had forecast construction spending rising 0.5 per cent in September after a previously reported 0.7 per cent drop in August. July's outlays were revised up to show them rising 0.5 per cent instead of falling 0.3 per cent as previously reported.
Spending on private construction projects dipped 0.2 per cent in September, with outlays on residential construction rising 0.5 per cent after falling 1.2 per cent in August. The government reported on Friday that residential construction was a drag on economic growth in the third quarter.
Spending on private nonresidential structures, which includes factories, hospitals and roads, tumbled 1.0 per cent in September, the largest drop since December 2015, after rising 0.5 per cent the prior month.
Investment in nonresidential structures contributed to the economy's 2.9 per cent annualized growth rate in the third quarter.
Public construction spending declined 0.9 per cent in September, falling to its lowest level since March 2014.
Outlays on state and local government construction projects fell 0.8 per cent, declining for a third straight month. Federal government construction spending tumbled 1.9 per cent after surging 4.8 per cent in August.