Construction spending fell 1.3 percent in June

By MATT OTT Features Associated Press

U.S. construction spending declined in June for the second time in three months, as spending on government construction projects plunged by the largest amount in 15 years.

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Construction spending fell 1.3 percent in June, the biggest drop since a 1.8 decline in April, the Commerce Department reported Tuesday. Spending rose a tiny 0.3 percent in May.

The decline raises concerns that construction may not provide as much support for the overall economy as had been expected in the second half of the year.

The only positive reading in June was in non-residential construction, which ticked up 0.1 percent.

Home construction declined 0.2 percent, the third consecutive decrease in that category. Government spending fell 5.4 percent, the biggest drop since a 6 percent decline in March 2002.

The 0.1 percent rise in non-residential construction follows a 0.6 percent increase in May, with both gains following several months of declines. The gain in June was helped by a strong 2.9 percent increase in spending on office construction, which offset a 0.4 percent decline in the category that includes shopping centers.

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Overall spending was reported at a seasonally adjusted annual rate of $1.21 trillion, compared with last month's revised figure of $1.22 trillion.