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Construction spending falls 1.8 percent in June, biggest decline in more than 3 years

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In this July 3, 2014 photo, a construction worker builds housing for students near Drexel University in Philadelphia. The Commerce Department reports on U.S. construction spending in June on Friday, Aug. 1, 2014. (AP Photo/Matt Rourke) (The Associated Press)

U.S. construction spending fell in June by the largest amount in more than three years as housing, non-residential construction and government spending all weakened.

The Commerce Department says construction spending dropped 1.8 percent in June on a seasonally adjusted basis after rising by a revised 0.8 percent in May. It was the biggest setback since a 2.8 percent fall in January 2011.

The weakness was widespread with spending on housing down for a second straight month, falling 0.3 percent, while non-residential building activity fell 1.6 percent, the biggest decrease since January. Spending on government projects dropped 4 percent, the biggest decline in more than a decade.

The June performance represented a setback to hopes stronger construction activity will help support overall economic growth.