The 0.3 percent decrease brought the value of new construction to $1.093 trillion at an annual rate. Spending fell 1.7 percent in May. Economists were expecing a 0.7 percent increase in June.
The decrease may be a reflection of government revisions in July that switched four of the first five months of this year from gains to declines, and made February a record month for construction. Construction spending is still up 7.9 percent from the same month last year.
Last month the Commerce Department revised its data back to 1998 to incorporate more detailed numbers on capital spending. Before the revisions, construction spending had risen for 15 straight months.
Privately funded construction fell 0.2 percent to an $843.8 billion rate in June, from $845.6 billion the month before.
Non-residential construction declined 0.4 percent to $483.9 billion in June from $484.6 billion the month before. The value of new construction for factories, utilities and highways fell in June.
Borrowing costs within one percentage point of 40-year lows and continued economic growth are supporting construction spending and generating new jobs, economists said. The U.S. added 1.088 million jobs through June of this year after 2.2 million jobs for all of 2004, the latest Labor Department data show.
Government-funded construction fell 0.5 percent in June to $249.2 billion at an annual rate after rising 3.2 percent the month before. Federal construction increased 4.9 percent. State and local spending fell 0.8 percent.
