U.S. construction spending drops largest amount in five years

U.S. construction spending in October dropped by 1 percent, the biggest decline since September 2001, to a seasonally adjusted annual rate of 1.18 trillion dollars, the Commerce Department reported Friday.

But the October reading was up 0.5 percent from the same period of last year.

For October, spending on private construction declined by 1.5 percent to a seasonally adjusted annual rate of 905.3 billion dollars.

Of which, residential construction plunged 1.9 percent, the biggest decline since July, to a seasonally adjusted annual rate of 597.1 billion dollars. It was the seventh consecutive month that residential construction fell, marking the longest stretch of weakness on record.

Nonresidential construction, meanwhile, decreased by 0.7 percent to a seasonally adjusted annual rate of 308.2 billion dollars. That was the second straight decline in this category.

However, public construction spending increased 0.8 percent in October to a seasonally adjusted annual rate of 273.1 billion dollars, hitting an all-time high.

During the first 10 months of this year, construction spending increased by 5.9 percent from a year ago to 1.0084 trillion dollars.

The October decline in construction spending provided a fresh evidence that the once-sizzling housing market has cooled.

Latest government data showed that the slowdown in housing trimmed 1.16 percentage point from economic growth in the July- September quarter, a period when the economy grew at an annual rate of just 2.2 percent, compared to gains of 2.6 percent in the second quarter and 5.6 percent in the first three months.

Source: Xinhua