Construction Spending Tumbles

Spending falls at fastest rate since 1994
By Kevin Spak,  Newser Staff
Posted Mar 3, 2008 10:23 AM CST
Construction Spending Tumbles
Work progresses on a new home in a Little Rock, Ark. neighborhood Tuesday, Feb. 19, 2008. (AP Photo/Danny Johnston)   (Associated Press)

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. (More housing stories.)

Get the news faster.
Tap to install our app.
X
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.

X