US construction spending at five-month low

 
City A.M. Reporter
US construction spending fell more than expected in January to its lowest level in five months, pulled down by weak private construction outlays, government data has shown.

The Commerce Department said construction spending fell 0.7 per cent to an annual rate of $791.8bn (£489.6bn), the lowest since August 2010.

December's spending was revised to show a smaller 1.6 per cent drop than the previously reported 2.5 per cent decline.

Economists polled by Reuters had forecast construction spending falling 0.4 per cent in January.

Private construction spending in January contracted 1.2 per cent as investment in non-residential projects tumbled 6.9 per cent to $244.4bn, the lowest since August 2004.

The percentage decline was the largest since January 1994.

However, private residential construction rose 5.3 per cent, likely reflecting a pickup in the construction of multi-family homes as demand for rentals rises.

Spending on public construction edged up 0.1 per cent in January, with spending on federal projects surging 9.1 per cent.

State and local governments, which are under heavy budgetary pressures, saw their spending on construction dropping 0.9 per cent.