By MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON (AP) — Spending on U.S. construction projects decreased in May, showing the first drop in six months, as spending on home building fell for a fifth straight month.
The Commerce Department reported on Monday that spending fell by 0.8% in May, showing the first decline since a 1.3% drop in November, to a seasonally adjusted annual rate of $1.29 trillion. Spending in April was revised up from a flat reading to a small gain of 0.4%.
The weakness in May was widespread, as spending on single-family homes and apartments decreased by 0.6% and nonresidential construction fell by 0.9%. Spending on government projects also dropped by 0.9%, led by a decline in construction spending by the federal government.
Spending on residential construction has been weak for a number of months but builders are hopeful that declining mortgage rates will lead to a rebound.
The 0.6% decline in spending on residential construction was the result of a 0.8% decrease in spending on new single-family homes, a development that was partially offset by a 1.9% spending increase in the small-apartment sector.
The 0.9% drop in spending on nonresidential construction followed a 1.4% decline in April. The weakness in May was the result of spending declines on various types of projects, including office buildings and a category that covers shopping centers.
The 0.9% drop in spending on government construction projects was the first decline in five months. Spending by state and local governments fell by 0.6% while spending by the federal government was down a larger 5.2%.