Construction Spending Down Less Than Expected

Washington, DC, July 1, 2010--Construction spending in the U.S. fell in May for the first time in three months, the Commerce Department reported.

The 0.2 percent drop was less than forecast and brought spending down to $841.9 billion, Commerce Department figures showed. The government revised the April increase down to 2.3 percent, less than previously estimated.

New home sales are dropping after the expiration of a government tax credit that boosted builder confidence and brought housing starts to the highest level in more than a year in April. Residential sales and construction will now depend on the state of the labor market and on foreclosures.

Private construction spending fell 0.5 percent following a 2.8 percent increase for April. Homebuilding outlays dropped 0.4 percent. Private non-residential projects decreased 0.6 percent.

Spending on public construction rose 0.4 percent from the prior month, led by a 0.6 percent gain in state and local government outlays. Federal construction spending dropped 1.3 percent.