Decline in Construction Shows Signs of Moderating

Washington, DC, April 1, 2009--U.S. construction spending was better than expected in February, a government report on Wednesday said, suggesting that the pace of deterioration was start to moderate.

The Commerce Department said spending on construction projects slipped 0.9 percent to a seasonally adjusted annual rate of $967.5 billion, the lowest since March 2004, after falling by a revised 3.5 percent in January.

Analysts were expecting a 1.8 percent decline in overall construction spending in February. Compared to the same period a year-ago, construction spending dropped 10 percent. Spending in the first two months of 2009 is down 10.9 percent versus the same period last year, the department said.

Private residential construction spending, the main trigger of the U.S. recession, tumbled 4.3 percent in February to $275.1 billion, the lowest since December 1997, after falling 3.7 percent the prior month.

Spending on public construction rose 0.8 percent in February, the biggest gain since October, versus a 2.4 percent decline in January, while spending on private nonresidential structures increased 0.3 percent after falling 4.3 percent the prior month.