Construction Spending Continues To Fall

From Reuters:

“A separate Commerce Department report showed construction spending fell 0.8 percent as home building continued to wither. The drop was the biggest since July and it took construction spending down to a $1.158 trillion annual rate, the lowest in two years.

Rising delinquencies in the risky subprime mortgage market will likely prolong the deterioration.”

From Financial Week:

“Private, non-residential construction, which includes office buildings and shopping malls, also showed significant weakness as it dropped by 0.5% in the quarter, its first decline in 13 months. Mr. Newport called that ‘an ominous sign [since the sector] had been on a roll, increasing 26 times in 27 months prior to October.’

Private, non-residential construction had been a bright spot this year for the industry, making up for some of the decline in residential spending and providing construction jobs, ‘but I think things have changed since August, as companies have found it hard to get financing for anything,’ Mr. Newport added.”

From Forbes:

“’There will be more hefty declines to come,' warned Ian Shepherdson of High Frequency Economics. 'These numbers lag building permits, whose fall has re-accelerated in recent months.'”