U.S. May construction spending lowest in 5 years
WASHINGTON (Reuters) - U.S. construction spending fell 0.9 percent in May to the lowest rate in more than five years, with the economic stimulus plan passed in February providing little relief in public construction, according to Commerce Department data released on Wednesday.
The drop was more than expected, with economists polled by Reuters forecasting a fall of only 0.5 percent. April's spending was revised downward to an increase of 0.6 percent from March, compared to the 0.8 percent increase originally reported.
Total spending in May was at a seasonally adjusted annual rate of $964 billion, which was the lowest since March 2004. Construction spending fell for six consecutive months before April's increase.
Private construction dropped 1 percent in May to a rate of $649 billion, the lowest in six years. Residential construction, which makes up more than a third of private building, slipped 3.4 percent to its lowest level since December 1995.
The U.S. Congress passed the $787 billion stimulus package with billions for capital works projects in the hopes of employing the thousands of construction workers who lost their jobs when the housing bubble burst.
But public construction dipped 0.6 percent in May, three months after the plan took effect. Highway and street construction fell 1.3 percent, and power plant construction was down 6.5 percent. Transportation spending rose 0.6 percent, and education was up 0.5 percent, Commerce said.
(Reporting by Lisa Lambert, Editing by Neil Stempleman)