U.S. construction spending fell 0.3% in May. Growth in housing, the economy’s standout performer, slowed while activity in areas most directly impacted by the pandemic showed further weakness.

The Commerce Department reported Thursday that the May decline followed a slight 0.1% rise in April and left overall construction spending up 7.5% from a year ago.

Housing construction, which has been a driving force for the economy during the pandemic, posted a tiny 0.2% gain in May as single-family home construction rose 0.8% while apartments and other multifamily construction was flat. Over the past year, housing construction is up 28.7% with single-family construction up a sizzling 46.1%.

Nonresidential construction activity fell 1.1% in May with hotel and motel construction and the category that covers shopping centers, two areas heavily affected by the pandemic shutdowns, both falling. Over the past year, nonresidential construction is down 5.8% while the hotel and motel category is down 23.2%.

Spending on government projects dipped a slight 0.2% in May and is down 8.7% over the past year, reflecting the squeeze many levels of government have felt from falling tax revenues

Nancy Vanden Houten, an economist with Oxford Economics, said she believed the big gap between home building and nonresidential construction would start to narrow “as a recovery in private nonresidential investment takes hold as the recovery accelerates.”

She said that supply chain constraints for lumber and other building materials may dampen growth in both residential and nonresidential spending for a time. But she said the recent plunge in lumber prices after a sharp runup in prices should ease cost pressures.

The various changes in May left overall construction spending at a seasonally adjusted annual rate of $1.545 trillion.

(AP)