“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.”
“’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.'”