Construction spending edged up 0.1 percent to an annual rate of $956.1 billion in May, the third consecutive month of gains. April's construction spending was revised up to show a 0.8 percent rise, and the spending rate was 6.6 percent higher than in May 2013. For the first five months of 2014, total spending rose 8.2 percent from the January-May 2013 total.

Total construction spending grew for the third straight month in May, according to a July 1 report from the Commerce Department, as increases in private nonresidential and public construction outweighed a downturn in residential projects.

"The May figures show that construction activity continues to expand, but with lots of variability by month and project type," said Ken Simonson, chief economist for the Associated General Contractors of America (AGC). "These uneven patterns seem likely to continue for the rest of the year."

Private residential construction spending in May retreated 1.5 percent from April, when homebuilders may have put in extra hours to make up for adverse winter weather in many regions. The May total was 7.5 percent above the May 2013 level, representing an 11 percent increase in single-family spending, 31 percent for multifamily and a 2.4 percent decline in improvements to existing housing.

Construction spending in May was held back by a 0.3 percent decline in private construction projects, which offset a 1.0 percent rise in public construction outlays. The largest public segment, highway and street construction, expanded 2.3 percent from a year before. The second-biggest category, educational construction, gained 1.7 percent since May 2013. Spending by the federal government dropped 8.9 percent, the largest fall since December 2010. State and local government projects, which encompass the bulk of public outlays, increased 2.0 percent.

Private residential construction fell 1.5 percent, reflecting weak housing starts. Private nonresidential spending rose 1.1 percent in May, and 11 percent year-over-year. The largest private segment, power construction, rebounded 4.3 percent from a sharp drop in April and was up 30 percent year-over-year. Among other major private nonresidential segments, commercial construction climbed 6.5 percent over 12 months; manufacturing construction rose 6.7 percent; and office work jumped 23 percent. Private construction is the largest portion of construction spending.

"The outlook is brightest for multifamily and oil and gas-related projects, including manufacturing," Simonson said. "But single-family and office construction, which have done well so far, may fade later this year."