US construction spending was flat in April as housing fell

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.

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The Commerce Department said 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 1% in February.

The data suggests 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 in recent weeks rates have dropped below 4%, potentially reviving sales. Commercial construction fell sharply in April, driven by a steep decline in construction of factories.

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

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

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