WASHINGTON, (Reuters) – The U.S. saw a decrease in construction spending in October due to a drop in homebuilding and a rise in public project outlays.

According to the Commerce Department, construction spending increased 0.2% in October after falling 0.1% last September.

Reuters polled economists to forecast that construction spending will rise by 0.4%. In September, construction spending grew 8.6% year-on-year.

After falling 0.1% in September, October saw a 0.2% decline in spending on private projects. The 0.2% drop in residential construction spending has resulted in 0.5% decreases.

The single-family homebuilding market declined by 0.8% while the outlays for multi-family housing projects dropped by 0.1%. The main reasons behind the slowdown in homebuilding are shortages of building materials and high costs. In the third quarter of 2018, residential investment fell for the second quarter. The decline in single-family homebuilding, and home improvements caused it to contract.

Private non-residential investments like drilling for oil and gas rose by 0.2% in October. The July-September quarter saw a decrease in spending on structures, primarily due to commercial and healthcare buildings.

After dipping 0.1% last September, spending on public projects jumped 1.8% to October. Spending on projects of state- and local governments rose 0.9% while spending by the federal government accelerated to 14.6%.