2 Minute Read by Reuters Staff (Reuters) – WASHINGTON, July 1 (Reuters) – Construction spending in the United States unexpectedly fell in May, with gains in private homebuilding offset by continued weakness in nonresidential structures and public projects. Construction spending fell 0.3 percent in May, after rising 0.1 percent in April, according to the Commerce Department. Construction spending was expected to rise 0.4 percent, according to economists polled by Reuters. Construction spending grew 7.5 percent year over year in May, accounting for around 3.6 percent of GDP. Private construction spending declined 0.3 percent, dragged down by a 1.1 percent drop in nonresidential construction, such as gas and oil well drilling. For the sixth quarter in a row, business investment in nonresidential structures has decreased. In April, private construction spending increased by 0.3 percent. Residential investment increased by 0.2 percent, boosted by a 0.8 percent increase in single-family home construction. Housing demand is strong, but high-cost building materials, particularly frame lumber, are limiting builders’ ability to crank up development. Last month, the government announced that homebuilding increased marginally in May, while future home construction permits fell to a seven-month low. Housing completions also fell, while the number of dwellings that have been approved for construction but have yet to begin surged to its highest level since 1999. Residential construction spending increased by 0.7 percent in April. After falling 0.6 percent in April, spending on public construction projects dipped 0.2 percent in May. (Lucia Mutikani contributed reporting, and Andrea Ricci edited the piece.)/n
Read More
