Construction Spending Drops In April; Housing Market Still Weak

Washington, D.C. (AHN) - Construction spending dropped again in the month of April as home building continued more than two-year slump.

The housing market remained weak as the consumer spending decreased in construction sector but increased in non-residential spending activity.

The Commerce Department released a report on homebuilding showed that the U.S. construction spending dropped by 0.4 percent in April, compared to the spending fall by 0.6 percent in March.

The government had earlier estimated the spending to fall by as much as 1.1 percent during that month.

The market analysts surveyed by the reports had projected the construction spending, which has not gained since September last year, to fall by 0.6 percent in April.

Details of the release showed the rivate residential construction spending to declined by 2.3 percent in April from a 3 percent drop in March.

While, private non-residential construction spending gained by as much as 1.6 percent, which is the third straight monthly increase, pushing the activity to a seasonally adjusted annual rate of $388 billion.

Total non-residential construction, including public projects, climbed up by 0.7 percent, lower by a 1.1 percent rise registered in the prior month and the spending 11.6 percent higher from a year earlier.

Public or government construction decreased by 0.3 percent, due to decline in the number of highway and power-plant projects.

Meanwhile, a nationwide private report showed manufacturing index in the U.S. contracted less than forecast in May, easing concern on the slowing down of the U.S. economy.

The manufacturing activity in the U.S. contracted to 49.6 percent in May, compared to the reading registered at 48.6 percent the previous month.