WASHINGTON, May 1(Reuters) - U.S. construction spending unexpectedly fell in March amid broad declines in outlays on private and public projects.

The Commerce Department's Census Bureau said on Thursday that construction spending dropped 0.5% after a slightly downwardly revised 0.6% increase in February. Economists polled by Reuters had forecast construction spending gaining 0.2% after a previously reported 0.7% jump in February.

Construction spending increased 2.8% year-on-year in March.

Spending on private construction projects fell 0.6%. Investment in residential construction slipped 0.4%, with outlays on new single-family projects edging up 0.1%.

High mortgage rates and tariffs on imported goods are constraining homebuilding. The National Association of Homebuilders estimated last month that the latest round of tariffs, including boosting duties on Chinese imports to 145% and imposing a 25% levy on foreign steel and aluminum had increased construction costs by $10,900 per home.

Outlays on multi-family housing units were unchanged in March. Investment in private non-residential structures like offices and factories declined 0.8%.

Spending on public construction projects eased 0.2%. State and local government spending also fell 0.2%, while outlays on federal government projects decreased 0.4%.