There was only one kernel of strength in non-residential spending, which came from a $263 million, or 2.4%, increase in spending on water supply projects. The only other positive was a meager $8.0 million increase in office buildings. Weakness was widespread, led by a $3.5 billion decline in highways and streets, a $2.1 billion drop in power projects and a $1.5 billion decline in educational facilities.
Also unlike past months, both private and public spending declined. Private spending fell by $6.4 billion, split nearly evenly between residential and non-residential spending,. Public construction plunged by $10.6 billion, driven almost entirely by non-residential spending. Weakness in private non-residential spending was led by a $1.3 billion decline in manufacturing and a $1.3 billion drop in power projects. The only real strength was a $1.1 billion increase in office buildings. On the public side, the weakness was led by a $3.4 billion plunge in highways and streets. Public non-residential spending accounted for over half of the drop in total construction spending.
The residential sector of the U.S. economy has been a pillar of strength over the last several years. This has helped to soften the blow from weaker government spending during the same period. Despite falling interest rates, housing activity was quite weak in April. This is a concern for the economy, and along with slowing inflation, just may lead the Fed to hold rates steady at its June FOMC meeting.