U.S. construction spending declined to a decade low of $805 billion in July, as investment dropped 1 percent from revised June totals, the Associated General Contractors said.

Citing Census Bureau figures, the association said private sector construction is depressed. And state and city budget cuts are dampening the positive effects of federal stimulus construction projects.

“While the stimulus is funding some vital infrastructure projects, the private sector is too cautious and state and local governments are too cash-strapped, to help,” said Ken Simonson, the association’s chief economist. “As a result, overall construction spending is at its lowest level in a decade and hundreds of thousands of construction workers are unemployed.”

Overall construction spending has contracted by one-third since its record high in July 2006, he added.