Construction spending unexpectedly rose 0.1 percent in June as increased investment in public projects offset the 15th straight monthly decline in private nonresidential construction, a government report showed on Monday.
The Commerce Department said construction spending rose to an annual rate of $836.0 billion. May's construction outlays were revised to show a bigger 1 percent decline instead of the previously reported 0.2 percent slip.
Economists polled by Reuters forecast construction spending falling 0.5 percent in June.
Spending on public projects rose 1.5 percent in June, reversing the prior month's slide. State and local government spending on construction projects rose 1.1 percent after slipping 0.1 percent in May. Federal construction jumped 4.6 percent to a record high $31.7 billion, after falling 2 percent in May.
However, investment in private construction fell 0.6 percent to $527.6 billion after a 1.4 percent drop in May. Private construction investment spending was held back by a 0.8 percent fall in private home building, reflecting the end of a popular home-buyer tax credit.
A government report on Friday showed new home construction rebounded in the second quarter, growing at its fastest pace since the third quarter of 1983. The gain, which supported second-quarter gross domestic product growth, indicated a spurt in building activity spurred by the tax credit that expired in April.
Private nonresidential spending fell 0.5 percent in June, the 15th straight decline, after dropping 1.3 percent the prior month.
(Reporting by Lucia Mutikani; Editing by Neil Stempleman)