WASHINGTON, (Reuters) - - U.S. construction spending unexpectedly fell in September as outlays on private nonresidential structures recorded their biggest decline in nine months, which could see a mild downward revision to the third-quarter economic growth estimate.
The Commerce Department said on Tuesday that construction spending slipped 0.4 percent after an upwardly revised 0.5 percent drop in August. Construction outlays were down 0.2 percent from a year ago.
Economists polled by Reuters had forecast construction spending rising 0.5 percent in September after a previously reported 0.7 percent drop in August. July's outlays were revised up to show them rising 0.5 percent instead of falling 0.3 percent as previously reported.
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Spending on private construction projects dipped 0.2 percent in September, with outlays on residential construction rising 0.5 percent after falling 1.2 percent in August. The government reported on Friday that residential construction was a drag on economic growth in the third quarter.
Spending on private nonresidential structures, which includes factories, hospitals and roads, tumbled 1.0 percent in September, the largest drop since December 2015, after rising 0.5 percent the prior month.
Investment in nonresidential structures contributed to the economy's 2.9 percent annualized growth rate in the third quarter.
Public construction spending declined 0.9 percent in September, falling to its lowest level since March 2014.
Outlays on state and local government construction projects fell 0.8 percent, declining for a third straight month. Federal government construction spending tumbled 1.9 percent after surging 4.8 percent in August.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci)