Construction spending in July was flat after declining for two months, the Commerce Department reported Wednesday. Private builders’ construction projects fell to the lowest level in six years, but an increase in government work buoyed July’s figures.
Commercial construction continued to be a weak link, probably due to companies’ unwillingness to make big spending commitments and difficulties some firms are having obtaining terrorism insurance after Sept. 11.
“Nonresidential building has been the weakest part of the construction picture and a big victim of 9-11,” economist Clifford Waldman of Waldman Associates told the Associated Press.
Private nonresidential construction is not likely to expand until the economy shows more signs of sustained growth, Ken Simonson, chief economist for the Associated General Contractors of America, told AP.
On the other hand, spending on government projects such as highways, schools, hospitals and military facilities rose 0.9 percent in July. But Simonson warned much of that work may have been authorized before the downturn in the economy.