Construction Spending in U.S. Fell 0.3% in February, Less Than Economists Expected (Bob Willis)

Created by : Francis Goodwin View profile

April 1 (Bloomberg) -- Spending on U.S. building projects fell in February for a fifth consecutive month as the housing recession dragged on and construction of offices and utility plants declined.

The 0.3 percent decrease, less than economists forecast, followed a revised 1 percent drop in January that was smaller than initially reported, the Commerce Department said today in Washington. Building of private non-residential projects including offices declined for a third straight month.

Homebuilding is likely to slow economic growth for a third year as sales continue to fall and builders delay new projects to work off nearly 10 months of inventory. Stricter lending standards spawned by subprime mortgage defaults now are restraining commercial projects, which until recently were a source of strength.

``We're starting to see weakness in non-residential construction, particularly commercial real-estate, that has to do with the overall slowdown in the economy,'' Michelle Meyer, economist at Lehman Brothers Holdings Inc. in New York, said before the report. ``The housing recession has spread to the rest of the economy.''

A private survey today showed manufacturing in the U.S. contracted less than forecast in March as companies benefited from growing exports.