US construction spending fell more steeply than expected in December to its lowest level since 2003, dragged down by a sharp drop in private residential and state and local government construction, a government report showed on Monday,
The Commerce Department said construction spending dropped 1.2 per cent to US$902.5bn, falling for a second straight month. November’s construction spending was revised down to show a 1.2 per cent decline, instead of a 0.6 percent fall.
Economists surveyed by Reuters had forecast construction spending falling 0.5 per cent in December. For the whole of 2009, construction spending fell by a record 12.4 per cent.
In December, spending on private home building dropped 2.8 per cent, the largest decline since May, after falling 1.4 per cent the prior month. Residential investment is showing signs of renewed weakness and made a modest contribution to gross domestic product in the fourth quarter compared to the previous three-month period.
Private non-residential spending, which has been buffeted by high vacancy rates and tighter access to credit, rose 0.2 per cent in December after falling 0.9 per cent the prior month.
Spending on state and local government construction projects fell 1.5 per cent in December after falling by the same margin in November. (Edited report from Reuters).