U.S. Construction Spending Falls in October

U.S. construction spending fell 1 percent in October, according to statistics released by the U.S. Census Bureau.

A 1.5 percent drop in private construction and a 1.9 percent decline in private residential construction contributed to the overall decline.

“A closer look at the subcategories shows nonresidential construction still has many areas of strength,” says Ken Simonson, chief economist for the Associated General Contractors of America (AGC), in a news release commenting on the statistics. “For instance, lodging construction—mainly hotels and resorts—leaped 8 percent in October and was up 70 percent from the October 2005 level.” Simonson also pointed to gains in multi-retail and private hospital construction of 1.3 percent and 0.5 percent, respectively.

Simonson also reported some gains in two major public categories: highway and street construction, which gained 0.3 percent for the month and education spending, which rose 0.2 percent in October.

“Going forward, I think there is still plenty of life left in hotel, hospital, energy-related and public spending,” says Simonson. “But single family home construction will remain in free-fall for several more months.”