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WASHINGTON – Spending on U.S. construction projects was essentially unchanged in September, the weakest showing since June, as an increase in home construction was offset by a slide in spending on government projects.
The Commerce Department said Thursday that the flat reading for September followed by 0.8 per cent in August.
The strength last month was driven by a 0.6 per cent increase in residential construction and a smaller 0.1 per cent increase in nonresidential activity, which has grown this category to an all-time high. However, these gains were offset by a drop of 0.9 percent in spending on government projects.
The increase in residential construction featured an 8.7 per cent drop in apartment construction, which offset 0.8 per cent drop in single-family homes.
Apartment building can be volatile from month to month. Overall, the industry has struggled for much of this year as it has had to cope with rising costs for land, lumber and labor. Part of the increase in lumber prices Trump administration has imposed on canadian softwood lumber.
Residential construction has been a drag on the overall economy, falling every quarter this year. While business construction was strong in the first two quarters, it fell to 7.9 percent in the July-September quarter. The decline is viewed as a potential income tax breaker for the $ 1.5 trillion tax cut pbaded last December may be starting to wane.
While overall construction was flat last month on a percentage basis, it did not go far enough.
The 0.1 per cent rise in private non-residential construction boosted this category to $ 463.9 billion in annual growth rate, which includes shopping centers.
© Copyright 2018 Flin Flon Reminder
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