IE 11 is not supported. For an optimal experience visit our site on another browser.

Construction spending falls to 2003 levels

Construction spending fell for a third straight month, pulled down by a slump in private nonresidential spending and weak public construction, a government report showed.

U.S. construction spending fell for a third straight month to its lowest level since June 2003 in January, pulled down by a slump in private nonresidential spending and weak public construction, a government report showed on Monday.

The Commerce Department said construction spending dropped 0.6 percent to $884.13 billion, after falling by an unrevised 1.2 percent in December.

Economists surveyed by Reuters had forecast construction spending falling 0.7 percent in January.

Private nonresidential spending, suffering from high vacancy rates, tumbled 2.1 percent in January to $316.42 billion, the lowest level since November 2006, after falling 0.7 percent in December. It was the tenth straight month of decline.

State and local government investment in construction projects fell 0.9 percent in January, down for a seventh straight month, after declining 0.6 percent in December.

Public construction spending decreased 0.7 percent in January following a 0.4 percent drop the prior month.

Spending on private home building jumped 1.3 percent in January after dropping 2.8 percent the prior month.

After rebounding strongly in the third quarter of 2009, investment in new home construction has lost some momentum, raising the specter of renewed weakness in the housing sector. The collapse of the housing market helped to push the economy into its worst downturn since the 1930s.

Residential investment spending slowed to a 5 percent annual rate in the fourth quarter after surging 18.9 percent in the July-September period, government data showed on Friday.

Federal construction spending rose 1.9 percent to a record high of $30.68 billion in January, and advancing for the fifth straight month.