Oct 3, 2016 2 min read

WASHINGTON – U.S. builders trimmed spending on construction projects in August for a second consecutive month, with housing, nonresidential and government activity all seeing declines.

Construction spending dropped 0.7 percent in August after a 0.3 percent slip in July, the Commerce Department reported Monday. It was the third decline in the past five months.

Residential construction decreased 0.3 percent, while nonresidential activity was down 0.4 percent. Spending on government projects fell 2 percent, dragged down by a sharp drop in activity at the state and local level. That fell to the lowest point since March 2014.

Economists believe the slowdown in construction will be temporary, with ultra-low interest rates and a growing economy prompting greater building activity in coming months.

Construction spending totaled $1.14 trillion in August at a seasonally adjusted annual rate, down 0.3 percent from the level in August 2015.

The strongest sector over the past year was nonresidential activity, which is up 4.2 percent from a year ago, followed by residential construction, which rose 1.4 percent. By contrast, total public construction is down 8.8 percent from the level 12 months ago, reflecting a squeeze on spending from efforts to control budget deficits at all levels of government.

For August, the decline in home building reflected a 0.9 percent drop in the construction of single-family homes, which offset a 2.4 percent increase in apartment construction.

In the nonresidential categories, office building and spending on hotels were both up in August.