The Commerce Department reported that spending for all building projects fell by 0.7% in June to a seasonally adjusted annual rate of $861.6 billion. The June decline was the fourth straight drop in building activity and was the largest since a 1.3% fall in July 2000.

Building activity in May, which originally was reported as a 0.3% increase, was revised down to a decline of 0.2%. Part of the newfound weakness was the result of annual revisions for the past three years to reflect better data.

The government reported last week that the overall economy was barely staying out of a recession in the April-June quarter with the gross domestic product managing to rise at a meager rate of just 0.7%.

For June, the overall decline in construction activity reflected weakness in both private sector work and government projects. Government spending dropped by 0.6% to $203 billion at an annual rate, the biggest decline since a 2.2% fall in June 2000. Spending fell for schools and other public buildings but managed a sizable increase of 1.2% for highway projects.

Spending in the private sector was down by 0.7% in June to an annual rate of $658.6 billion. That represented the lowest level for private sector spending since last November.

The weakness in the private sector reflected a drop of 0.7% in spending on residential construction, which fell to a rate of $390.9 billion in June. Spending on single-family homes actually rose by 0.3% in June but multifamily construction fell by 2.3%, the biggest decline since a 3% drop in May 2000.

Nonresidential construction rose slightly to a rate of $206.8 billion in June with strength in factory construction offsetting declines in office building and hotels.