Construction spending slipped 0.3 percent in June, the Commerce Department reported Aug. 2. During the first six months of this year, however, construction spending was 8.9 percent higher than it was for the same period last year.
The value of buildings put in place in June came in at a seasonally adjusted annual rate of $985.2 billion, a 0.3 percent decline from May. The drop in construction spending was the first since January. Economists had predicted construction spending would remain flat in June.
Still, the value of construction projects in June was 8.6 percent higher than for the same month a year ago.
Commercial construction projects built by private builders was virtually unchanged in June at a rate of $219.5 billion. Large government projects, meanwhile, increased by 0.2 percent in June from the previous month to a rate of $238.5 billion. Residential building, on the other hand, fell to $527.1 billion, a 0.6 percent decrease compared to May.
The construction spending decline is consistent with other economic data for June – including the nation’s employment report, retail sales and industrial production – prompting economists to say the economy hit a pothole that month.
Alan Greenspan, chairman of the Federal Reserve, told Congress he is optimistic the economic recovery will gain momentum in the months ahead.