The percent drop was biggest since October 2015 and followed a 1.6 percent fall in June. Investment in residential and nonresidential structures such as oil and gas wells is slowing
as the boost from recovering oil prices fades.
As a result, spending on private construction projects fell 0.4 percent in July after slipping 0.5 percent in June. Investment in private residential construction rose 0.8 percent.
Outlays on public construction projects dropped 1.4 percent to their lowest level since February 2014. That followed a 4.4 percent plunge in June. Spending on state and local government
construction projects fell 1.4 percent in July, also dropping to the lowest level since February 2014.
Federal government construction spending declined 1.2 percent to the lowest level since April 2016.
Construction spending was expected to reverse June’s losses to gain 0.6 percent in July. The indicator missed forecasts in the previous month when it declined 1.3 percent.
ISM manufacturing index expands in August
National factory activity gained for the third consecutive month in August, beating expectations and continuing expansion not seen since August 2014.
The U.S. manufacturing index registered 58.8 in August, up from 56.3 in July, beating estimates of 56.5, as polled by Reuters. A reading above 50 on the Institute for Supply Management’s (ISM) index indicates an expansion in manufacturing, which accounts for about 12 percent of the U.S. economy.