Construction Spending Declines
As Housing Outlays Plunge
by Jeff Bater
From The Wall Street Journal Online
September 04, 2007
U.S. construction spending unexpectedly tumbled in July as outlays for housing plunged, the government said Tuesday.
Meanwhile, U.S. manufacturing activity expanded at a slightly slower pace in August, although the gains had positive implications for the broader economy, a report Tuesday said.
Total spending decreased by 0.4% at a seasonally adjusted annual rate of $1.169 trillion, the Commerce Department said. Spending rose 0.1% in June; originally, June spending was seen 0.3% lower.
Wall Street had expected July construction spending would be flat. The 0.4% fall was the largest decline since a drop of 0.6% in January 2007.
Residential construction spending decreased in July, down by 1.4% to $541.9 billion. Residential spending decreased 0.4% in June; it was originally seen down 0.7% for the month. Year-to-year, residential was 15.6% lower in July.
Nonresidential construction spending rose by 0.6% in July. Outlays climbed for churches and schools, but fell for roads.
Private-sector construction spending during July fell 0.7% to $880.1 billion. Spending went 0.2% lower in June.
Public, or government, construction spending increased 0.7% to $289.0 billion. June outlays rose 1.0%. Federal government construction outlays dropped by 0.4%, but state and local spending -- much larger than federal spending in dollars -- increased 0.8% to $269.6 billion.
-- Michael S. Derby contributed to this article.
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