Nonresidential construction spending drops to lowest rate in 27 months

Spending on nonresidential construction activity tumbled 1.5 percent in October, seasonally adjusted, to the lowest annual rate since July 2007, according to a new analysis of Census Bureau data conducted by the Associated General Contractors of America. The data showed that nonresidential construction spending slumped to $652 billion, an 11 percent decline compared to October 2008, the association added.

"Even formerly robust construction segments, such as manufacturing and power, have run out of steam," said Ken Simonson, the association's chief economist, noting that spending on both categories of construction dropped more than 2 percent from September. "Worse, the impacts of the stimulus have been more limited and temporary because of needless delays and red tape," according to a Dec. 1 Construction News report.

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