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July 24, 2008 11:12:51 PM CDT

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Construction Spending Tumbles

Posted Mar 3, 08 10:23 AM CST in Business 

(Newser) – Construction spending fell at its fastest rate in 14 years in January, the Commerce Department announced today, shattering expectations with a 1.7% drop. Analysts had expected just a 0.7% decline, the Wall Street Journal reports. Residential spending was the big drag, falling 2.9%, but non-residential spending was also down and could keep heading in that direction as banks raise commercial loan standards.

“The collapse in non-residential building is the next shoe to drop,” one economist told Bloomberg. “Right now we have a very weak investment environment.” A separate report confirmed that manufacturing is officially contracting. The latest ISM index hit 48.3, its lowest point since April 2003. Any reading below 50 indicates contraction.

Sources: Wall Street Journal, Bloomberg, Bloomberg

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recession  • housing  • manufacturing  • construction  • Commerce Department  • manufacturing index  • residential building


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