Construction spending falls; federal highway funds lapse; ABI sinks; credit stays tight

Construction spending fell in January to $884 billion at a seasonally adjusted annual rate, down 0.6 percentfrom December, down 9.3 percent from January 2009 and the lowest rate since June 2003, the Census Bureau reported today [March 1]. November and December totals were revised down by 1.4 percent each, and the 2009 total, $937 billion, was 13 percent below the 2008 level. Private nonresidential spending shriveled 2.1 percent for the month and 20 percent compared to January 2009. Of 11 segments, only power construction rose (0.7 percent and 16 percent, respectively). The next largest segment, manufacturing, fell 4.8 percent and 29 percent. Commercial (retail, warehouse and farm) construction tumbled 0.5 percent and 34 percent; health care, -0.5 percent and -11 percent; office, -1.6 percent and -34 percent; communication, -6.0 percent and -9.9 percent; and lodging, -9.8 percent and -46 percent%. Public construction continued to post a year-over-year gain, 2.1 percent, but dropped 0.7 percent for the month. The largest public segments had mixed results: highwayand street, 1.2 percent and 5.5 percent; educational, 0.0 percent and -6.2 percent; transportation (transit, rail, airports, ports), -0.3 percent and 18 percent; and sewage and waste disposal, -3.0 percent and 1.8 percent. Private residential investment climbed 1.3 percent for the month and narrowed the year-to-year decline to 6.4 percent. The gains came entirely from the volatile “improvements” segment (4.7 percent and 11 percent); newsingle-family construction dipped after seven straight gains (-0.2 percent and -8.6 percent); and new multifamily plunged for the 10th month in a row (-11 percent and -52 percent), according to a March 1 Data DIGest report.

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