WASHINGTON, (Reuters) - - U.S. construction spending barely rose in July as a rebound in investment in public construction projects was offset by a decline in the private sector.
The Commerce Department said on Tuesday construction spending edged up 0.1%. Data for June was revised up to show construction outlays decreasing 0.7 instead of falling 1.3% as previously reported.
Economists polled by Reuters had forecast construction spending would rise 0.3% in July. Construction spending fell 2.7% on a year-on-year basis in July.
Investment in public construction projects increased 0.4% after tumbling 3.1% in June. Spending on state and local government construction projects rebounded 0.6%. That followed a 3.7% plunge in June.
Outlays on federal government construction projects fell 2.4% in July after surging 4.3% in the prior month.
Spending on private construction projects dipped 0.1% in July, reversing June’s 0.1% gain. Investment in private residential projects rose 0.6%, the most in eight months, after being unchanged in June.
Private residential investment was boosted by a 1.4% jump in single-family home building. There were also gains in home renovations.
Land and labor shortages have constrained homebuilding even as mortgage rates have dropped sharply from last year’s levels. Spending on residential construction has contracted for six straight quarters, the longest such stretch since the Great Recession.
Spending on private nonresidential structures, which includes manufacturing and power plants, dropped 0.8% in July to a seven-month low. That followed a 0.2% rise in June.
Investment in nonresidential construction fell at its steepest pace in more than three years in the second quarter. That contributed to business investment declining for the first time in more than three years. The economy grew at a 2.0% annualized rate in the April-June quarter, slowing from the first quarter’s brisk 3.1% pace.
Reporting by Lucia Mutikani Editing by Paul Simao
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