P.M. BRIEFING : June Construction Spending Down 0.8% to Lowest Level in 8 Months
Construction spending in June slumped 0.8% to its lowest level in eight months as declines in housing and government projects offset a gain in commercial building, the Commerce Department said today.
Residential, non-residential and public projection activity fell to a seasonally adjusted annual rate of $414.7 billion, the lowest level since October, the report said. The decline followed a 0.6% gain in May and a 0.8% drop in April.
Activity for the first six months of the year was only 2.9% above the same period in 1988, an increase that doesn’t even make up for the 4.8% rise in construction costs.
Economists have been expecting construction to be weak this year because of the Federal Reserve Board’s yearlong campaign, which ended in the spring, to fight inflation with higher interest rates. Since early June, the central bank has reversed course, allowing interest rates to decline modestly, and analysts now expect construction to rebound at least a bit.
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