WASHINGTON – U.S. construction spending unexpectedly dipped 0.1 percent in April, its first decline in 10 months, due to a sharp drop in outlays on residential building, a government report showed on Thursday.
Construction spending declined to a seasonally adjusted annual rate of $1.196 trillion in April from March's record pace of $1.197 trillion, which was revised slightly downward, the Commerce Department reported.
Wall Street economists polled by Reuters forecast April construction spending to be unchanged from the originally reported March rate of $1.199 trillion. The decline in total spending was the first month-on-month drop since June 2005.
Private construction fell 0.1 percent to an annual pace of $933.3 billion as private residential construction fell 1.1 percent to a $657.1 billion rate after hitting a record high in March. April marked the biggest fall for residential outlays since a 1.4 percent drop in January 2004.
Economists have been expecting a slowdown in the overheated U.S. housing market for some time and have anticipated that business spending would help to offset this drag on the economy.
Total private non-residential construction, seen as a proxy for business spending, jumped 2.5 percent to an annual rate of $276.2 billion.
Public sector construction spending fell 0.2 percent to $262.6 billion as spending declined in several categories including education, commercial and amusement and recreation.