By MATT OTT
WASHINGTON (AP) — Spending on U.S. construction projects edged up 0.4 percent in May, while April’s figure was revised down significantly — signs that new building is still uneven despite the country’s economic growth.
The uptick in May brought total construction spending to a seasonally adjusted all-time high of $1.31 trillion, which was 4.5 percent higher than the figure for a year ago, the Commerce Departments said on Monday. April’s figure was revised down to 0.9 percent from what was originally reported as a 1.8 percent gain, which would have been the largest increase seen in 24 years. That came on the heels of 0.9 percent drop in March, the first monthly drop seen since July of 2017.
Total spending on private construction rose 0.3 percent. Residential projects were up 0.8 percent in May. The construction of single-family homes rose 0.6 percent and the volatile apartment-building sector jumped 1.6 percent. Private, non-residential building fell 0.3 percent.
Economists are forecasting that construction spending will contribute to the country’s economic growth this year even though interest rates are rising. A lack of inventory has stymied homebuyers and pushed home prices higher as the demand for existing and new homes has surged.
Last month the Commerce Department reported that housing starts rose to a seasonally adjusted annual rate of 1.35 million, the strongest pace since July 2007, thanks to a surge of building in the Midwest.
Even as government budgets have tightened, spending on public projects in May rose 0.7 percent to $304.1 billion, the highest since October 2010. That gain was fueled by a 0.6 percent rise in state and local construction, which accounts for more than 90 percent of total government activity. State and local government spending came in at $282.1 billion, the most seen since September of 2009.
Spending on the power grid increased nearly 11 percent month-over-month, and is up more than 25 percent over a year ago.