Construction spending decreased 1.3 percent in June, missing forecast growth of 0.4 percent. The second decline in the last three months came as spending on government construction projects plunged by the largest amount in 15 years.

June was the biggest drop in construction spending since a 1.8 percent decline in April, with the only recent uptick coming from a tiny 0.3 percent increase in May.

The only positive reading in June was in non-residential construction, which ticked up 0.1 percent.

While construction has weakened in recent months, economists believe the slowdown will be temporary. They forecast that construction, particularly home construction, will rebound amid low unemployment.

Home construction declined 0.2 percent, the third consecutive decrease in that category. Government spending fell 5.4 percent, the biggest drop since a 6 per cent decline in March 2002.

– AP contributed to this report.

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