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Construction Spending Drops; Factories Stay Weak

U.S. construction spending fell a steeper-than-expected 1.1 percent in March after the prior month was revised sharply higher, a Commerce Department report showed on Thursday, with private home building suffering a record decline.

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AP

Separately, another report showed U.S. factory activity contracted in April, although the level of retrenchment remained steady.

Analysts polled by Reuters forecast construction spending to fall 0.6 percent in March after an upwardly revised 0.4 percent increase in February.

This had previously been reported as a 0.3 percent decline.

At a seasonally adjusted annual rate of $1.124 trillion, construction spending fell to its lowest reading in March since June 2005.

Private home building fell by a record 4.6 percent as the collapse of the country's housing market continued to hammer the industry. But private nonresidential construction spending, which advanced by 1.9 percent, hit an all-time high seasonally adjusted annual rate of $382 billion.

Meanwhile, the Institute for Supply Management said its index of national factory activity was unchanged in April from March at 48.6.

Economists' median forecast was for a result of 48.0, according to a Reuters poll. The 86 responses to the survey ranged from 45.5 to 50.0.