MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON (AP) — 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 percent in August after a 0.3 percent slip in July, the Commerce Department reported Monday. It was the third decline in the past five months.
Residential construction decreased 0.3 percent, while non-residential activity was down 0.4 percent. Spending on government projects fell 2 percent, 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 totaled $1.14 trillion in August at a seasonally adjusted annual rate, down 0.3 percent from the level in August 2015.
The strongest sector over the past year has been non-residential activity, which is up 4.2 percent from a year ago, followed by residential construction, which has risen 1.4 percent. By contrast, total public construction is down 8.8 percent 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 percent drop in the construction of single-family homes, which offset a 2.4 percent 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 centers declined.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Tagged with tED