US Construction Spending Slows in August

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US spending on construction slowed in August, with declines in both the private and public sectors, the Commerce Department reports.

Total construction spending fell 0.8 per cent from July to an annual rate of $US961 billion, but year-over-year was up 5 per cent.

The July figure was revised sharply lower to $US968.8 billion from the prior estimate of $US981.0 billion, the Commerce Department reported on Wednesday.

The August drop in construction spending was unexpected by economists; the estimate was for a modest 0.4 per cent increase.

Spending on private construction, which accounts for more than two-thirds of the sector, fell 0.8 per cent, led by a 1.4 per cent drop in spending on non-residential construction.

Public construction spending, which had surged in July, fell 0.9 per cent. Construction related to education was a main factor, falling 2.9 per cent.

For the first eight months of the year, construction spending was up 6.8 per cent compared to the same period of 2013.

“This is a volatile series but the 12-month trend is still headed in the right direction… higher,” said Jennifer Lee, an economist at BMO Capital Markets.


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