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Construction workers build a new bridge that runs over the Cleveland Metroparks Zoo in Cleveland, Ohio. Construction spending fell more than expected in May, a sign the problems facing the nation's builders are far from over.
Amy Sancetta / Associated Press


Published July 01, 2009 12:08 pm - WASHINGTON — Construction spending fell more than expected in May, a sign the problems facing the nation's builders are far from over.


Construction spending falls more than expected


By Martin Crutsinger
AP Economics Writer

WASHINGTON — Construction spending fell more than expected in May, a sign the problems facing the nation's builders are far from over.

The Commerce Department said Wednesday that construction spending dropped 0.9 percent in May, nearly double the 0.5 percent decline that economists expected. Adding to the signs of weakness, activity in the past two months was revised lower.

Construction rose 0.6 percent in April, down from the 0.8 percent increase originally reported. A March increase of 0.4 percent was replaced with a decline of the same amount. That left the April gain as the only increase in the past eight months.

For May, the only strength came in nonresidential activity. Residential construction dropped sharply, and spending on federal, state and local projects also declined.

Residential building fell 3.4 percent after a flat reading the month before. Spending on private home building dropped 33.9 percent from a year ago amid the steepest slump in housing in decades.

Nonresidential construction rose 0.5 percent with spending on transportation, power projects and manufacturing all growing.

Total public construction dropped 0.6 percent, the biggest decline since a 1.7 percent fall in January. Spending on federal projects fell 0.3 percent, while spending on state and local projects dropped 0.7 percent.

The changes left total construction spending at a a seasonally adjusted annual rate of $964 billion, down 11.6 percent from a year ago.



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