U.S. Construction Spending Drops in July Due to High Mortgages and Increased Supply
US: Construction spending in the US fell by 0.3% in July, a larger drop than the 0.1% expected by economists, as rising mortgage rates and increased supply pressured single-family homebuilding. The Commerce Department's Census Bureau reported that while construction spending was unchanged in June, it increased by 6.7% year-on-year in July. Spending on private construction projects and residential construction both declined by 0.4%, with single-family home construction plummeting 1.9%. This drop pushed single-family homebuilding to a 16-month low, with inventory levels near those seen in early 2008. Despite a slight drop in mortgage rates, the construction sector remains affected by excess supply and weak demand, causing builders to delay new projects. Investment in private non-residential structures, including factories, also fell by 0.4%, while public construction projects saw a modest 0.1% increase, with federal government spending rising by 2.1%.
Source: Reuters