Newspaper article THE JOURNAL RECORD

Construction Spending Down for Ninth Consecutive Month

Newspaper article THE JOURNAL RECORD

Construction Spending Down for Ninth Consecutive Month

Article excerpt

WASHINGTON (AP) - U.S. construction spending slid for a ninth straight month in December, falling 0.5 percent and helping to trim building growth for the year to just 0.6 percent, the government said Friday.

Many analysts forecast a rebound in residential building later this year but no significant improvement on the non-residential side. And government outlays remain a question mark because of the uncertain effects of the recession on revenues.

Overall, said economist Daryl Delano of Cahners Economics in Newton, Mass., ``I believe it will be a down year.''

The Commerce Department said spending on residential, non-residential and government projects in December totaled a seasonally adjusted annual rate of $415.1 billion, the lowest level since a $410.5 billion rate in January 1988.

Spending during the previous two months was even weaker than first reported. November expenditures were revised to show a 1.5 percent decline, down from 0.6 percent, while October spending fell 0.1 percent rather than rose 0.3 percent as first thought.

For the year, spending totaled $434.9 billion, up from $432.1 billion in 1989.

But construction has been sliding each month since posting a 0.4 percent gain last March because of tight credit, high vacancy rates and faltering consumer and business confidence because of the Persian Gulf crisis and a recessionary economy.

And a Labor Department report Friday suggested further declines in the months ahead. It said construction payrolls in January fell by 155,000, after seasonal adjustment, after a 28,000 drop in December.

The report said 450,000 construction jobs now have been lost since last May. …

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