WASHINGTON - Construction spending fell 1.3% in July, the Commerce Department reported Thursday, as business investment in buildings began to sag. July's rate was down from a revised 1.6% gain in June.
Economists polled by Thomson Reuters had a median forecast of a 0.2% increase.
Total private construction was reported down 0.9% after a 2.0% June rise.
Private-business-related construction, which has been the one bright spot in the construction industry, fell 0.4%.
Private residential construction was reported down 1.4% after three monthly increases. In the components broken out by the Commerce Department, new single family homebuilding rose 0.1% and the highly variable multi-family housing construction rate rose 1.4%. Those two can remain positive while the overall residential construction number declines because of a fall in home improvement spending. It was down 2.9% in July.
Government construction fell 2.1% in July to its lowest level since December 2006. State and local building was off 1.9% to its lowest since November 2006. Federal construction fell 3.6% to its lowest since January of last year.
Comerica economists had cautioned that "fiscal stimulus is unwinding, dragging down the pubic sector. Residential construction has yet to pick up the slack."
