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Construction spending flat in April as residential work slowed

Roofers work on a new house in Pepper Pike, Ohio, in March 2014. Spending on U.S. construction projects was unchanged in April as another decline in house construction was offset by a big gain in government spending on projects like highways and hospitals. (AP Photo/Tony Dejak, File)

Roofers work on a new house in Pepper Pike, Ohio, in March 2014. Spending on U.S. construction projects was unchanged in April as another decline in house construction was offset by a big gain in government spending on projects like highways and hospitals. (AP Photo/Tony Dejak, File)

By CHRISTOPHER RUGABER
AP Economics Writer

WASHINGTON (AP) — Spending on U.S. construction projects was unchanged in April as another decline in home construction was offset by a big gain in government spending on projects like highways and hospitals.

The Commerce Department said on Monday that the flat reading followed a small increase of 0.1% in March, which was revised higher from an initial estimate that showed a sharp decline. Construction spending rose by 1% in February.

The data suggest that Americans cut back on home renovations in April. And spending on new home construction was flat. Higher mortgage rates have weighed on home sales this year, though rates have dropped below 4%, possibly reviving sales. Commercial construction fell sharply in April, driven by a steep decline in the construction of factories.

Construction spending in the private sector plunged by 1.7%, showing the steepest decline in six years. Residential construction spending has fallen for four straight months.

Those declines were offset by a 4.8% increase in government construction spending, which rose to a record high of $299.4 billion. That was led by big gains in state and local government spending, which also rose to a record high.

Spending on highways and streets jumped by 6.8%, and school construction rose by 2.1%. Federal spending rose to $24.5 billion, the highest level seen since July 2013.

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