WASHINGTON (Reuters), Despite an increase in construction projects by the government, spending on U.S. building was flat in August. This was due to weakness in both the private and public sectors.

According to the Commerce Department, Friday’s unchanged construction spending reading was a result of a 0.3% increase in July. The August increase in construction spending was 8.9% year-on-year. Reuters polled economists and predicted that construction spending would rise 0.3%.

The spending for private construction fell 0.1% in July after an increase of 0.2%. The increase in residential construction spending was 0.4%. It is believed that this resulted from remodeling projects. In July, the margin of growth was the same.

Spending on single-family homes fell by 0.7%, while multi-family housing expenditures dropped by 0.8%. The cost of building materials, land and labor shortages are limiting homebuilding.

In August, investment in non-residential private construction such as gas drilling and oil well drilling fell 1.0%

The August increase in spending on public projects was 0.5%, which is the same as July’s growth. The federal government spent 4.6% less, while the state and local governments construction expenditures increased by 0.8%.