Sharp decline in housebuilding drags November's overall construction spending to lowest level in over nine years
US construction spending has fallen to its lowest level in over six years, as a result of a sharp decline in private home building.
The government's Commerce Department reported a fall in construction spending of 13% in November 2009 compared with the same month a year earlier, to $900bn, which is the lowest level since July 2003.
Spending on private housebuilding dropped 1.6% in November alone, the biggest decline since June, despite rising 4.8% the previous month, the department said. Compared with November 2008, it was down 19%.
While home sales have now stabilised, the threat of more foreclosures is thought likely to keep residential building down. Spending on non-residential construction, including public projects, also fell in November, by 0.4%.
Maxwell Clarke, chief US economist at IDEAglobal in New York, told Business Week: “Construction isn't going to be adding a lot to growth... when it comes to the battle between new construction and absorbing foreclosures, something has to take a hit and construction is it.”