US construction spending fell for a second straight month in September as a slight rebound in housing was offset by further declines in nonresidential building and in government projects.
Construction spending dropped 0.4 per cent in September compared to August when spending fell 0.5 per cent, the Commerce Department reported on Monday.
After four straight monthly declines, housing construction edged up 0.4 per cent in September but nonresidential building fell 0.6 per cent with weakness in construction of hospitals, power plants and factories. Government construction was also down, falling 1.3 per cent as spending on projects at the federal and state and local levels declined.
The overall declines in the past two months were disappointing but economists say the weakness will be temporary. They are looking for construction activity to support economic growth in coming months.
The September drop pushed construction spending down to $US950.9 billion ($A1.0 trillion) at a seasonally adjusted annual rate, still a modest 2.9 per cent higher than the level a year ago.
The increase in housing reflected a solid 1.1 per cent gain in construction of single-family homes which helped offset a 1 per cent drop in the smaller apartment sector.
Residential construction, which had fallen for four straight months, now stands at a seasonally adjusted annual rate of $US349.1 billion, a slight 0.7 per cent higher than a year ago.
The decline in government activity reflected a 0.3 per cent drop in spending at the federal level and a 1.4 per cent decline in spending at the state and local levels.
Government construction activity has been squeezed by tight budgets reflecting the severe 2007-2009 recession and the weak economic rebound since that time.