Unexpected Decline in Construction Spending in May
There was an unexpected decline in construction spending this past May after investment in private construction projects dropped to its lowest level in nearly two and a half years.
U.S. construction spending fell unexpectedly fell in May as an investment in private construction projects dropped to its lowest level in nearly two and a half years. Economists polled by Reuters had forecasted construction spending to rise in May by .1 percent.
The .8 percent drop is the biggest since last November, according to the Commerce Department. Data shows that construction spending fell 2.3 percent on a year-on-year basis in May.
Construction spending surged in the first quarter, boosted by increased investment in roads and highways by state and local governments, however spending on private projects has seen a .7 percent decline, the lowest since January 2017.
Investment in private residential projects also saw a decline of .6 percent in May, the lowest level since December 2016. Homebuilding has remained weak even as mortgage rates have dropped sharply from last year's high levels. Spending on residential construction has contracted for five straight quarters.