June Construction Spending Down Slightly

WASHINGTON - Construction spending slid in June by 0.3 percent, the Commerce Department reported Monday.

According to the report, the value of buildings put in place totaled a seasonally adjusted $985.2 billion in June, representing a 0.3 percent decline from May.

The decline, which came after a 0.1 percent gain in May, is consistent with other economic data for June - including the nation's employment report, retail sales and industrial production - that suggests the economy hit a soft patch that month.

Residential construction by private builders totaled $527.1 billion in June, a 0.6 percent decline from May. Commercial construction projects by private builders, such as office buildings, were largely unchanged in June at a rate of $219.5 billion.

The report also noted that big government projects increased by 0.2 percent in June from the previous month to a rate of $238.5 billion.

Kenneth Simonson, Associated General Contractors of America chief economist, believes each construction category is likely to behave differently over the next 6-12 months.

?EUR??,,????'??Residential construction will probably flatten or decline slightly under the twin burdens of slowly rising interest rates and higher costs for lumber, cement, delivery charges, and other inputs,?EUR??,,????'?? he said. ?EUR??,,????'??Nonresidential construction will gain ground as lodging, office, and eventually factory construction pick up. Public construction should rise next year as state budgets reflect the recent upward revisions in sales and income tax receipts.?EUR??,,????'??