U.S. construction spending drops by record amount in 2008

Special Report:Global Financial Crisis

WASHINGTON, Feb. 2 (Chinese media) -- U.S. construction spending

dropped by a record 5.1 percent in 2008, larger than the 2.6 percent decrease in

2007, the Commerce Department reported Monday.

Just like in 2007, the weakness last year was led by

huge decline in private residential construction, which plunged 27.2 percent,

the biggest drop since 1993.

For December last year, U.S. construction spending

declined by 1.4 percent to a seasonally adjusted annual rate of 1.05 trillion

dollars, or 3.6 percent below the year-ago level.

Spending on private construction was at a seasonally

adjusted annual rate of 737.1 billion dollars, 1.7 percent below the revised

November estimate of 749.6 billion dollars.

Private construction spending in 2008 totaled 770.4

billion dollars, down 9.4 percent from the 2007 level.

Private builders cut back their spending on

residential construction by 3.2 percent to a seasonally adjusted annual rate of

319.2 billion dollars in December.

Spending by private builders on a range of

nonresidential projects, including shopping centers, office buildings, hotels

and motels, meanwhile, fell by 0.4 percent to an annual rate of 417.9 billion

dollars.

Moreover, construction spending by the government was

down by 0.8 percent to an annual rate of 316.6 billion dollars in December.

For the year, government construction activity rose

7.4 percent, compared with a 12.4 percent increase in 2007.

The housing slump, which started in 2006 after having

experienced white-hot five years, is still underway due to tight credit markets,

souring consumer confidence in the overall economy and rising unemployment.

The nation's construction industry will be facing

severe troubles until the economy begins to recover, analysts believe.