US construction spending drops 0.6 per cent in June, biggest setback in 5 months

WASHINGTON – Spending on U.S. construction projects fell in June by the largest amount in five months as government building activity declined to the lowest level since 2006.

Even housing activity slowed but that setback was likely to be temporary.

The Commerce Department says construction spending dropped 0.6 per cent in June compared with May when spending had surged 1.3 per cent. It was the biggest decline since a 2.3 per cent fall in January.

Housing construction was flat during the month with a gain in remodeling offsetting declines of 0.8 per cent in single-family construction and a fall of 3.3 per cent in multi-family projects. Residential construction has been a bright spot in a sluggish economy this year and that strength was expected to continue even though mortgage rates have risen from their lows.