WASHINGTON, Sept 4 (Reuters) - U.S. construction spending barely rose in July as increases in homebuilding and investment in public projects were overshadowed by a sharp drop in private nonresidential outlays.
The Commerce Department said on Tuesday that construction spending edged up 0.1 percent. Data for June was revised up to show construction outlays declining 0.8 percent instead of the previously reported 1.1 percent drop.
Economists polled by Reuters had forecast construction spending increasing 0.5 percent in July. Construction spending increased 5.8 percent on a year-on-year basis.
Spending on private residential projects rebounded 0.6 percent in July following two straight months of declines.
While homebuilding rose in July, the overall trend has slowed, with builders continuing to complain about rising material costs as well as persistent land and labor shortages. Residential investment contracted in the first half of the year.
Spending on private nonresidential structures, which includes manufacturing and power plants, dropped 1.0 percent in July. That was the biggest decline since August 2017 and followed a 0.1 percent gain in June.
Overall, spending on private construction projects slipped 0.1 percent in July after decreasing 0.5 percent in June.
Investment in public construction projects increased 0.7 percent after tumbling 1.7 percent in June. Spending on federal government construction projects rebounded 2.5 percent. That followed a 3.0 percent drop in June.
State and local government construction outlays advanced 0.6 percent in July after falling 1.6 percent in the prior month.
Reporting by Lucia Mutikani Editing by Paul Simao