CONSTRUCTION DOWN SEVEN STRAIGHT MONTHS

This article appeared on MarketWatch.com this morning.......

CONSTRUCTION DOWN SEVEN STRAIGHT MONTHS

By Greg Robb
10:11 AM ET Jan 4, 2010

WASHINGTON (MarketWatch) -- Spending on U.S. construction projects fell in November, marking the seventh straight monthly decline, the government reported Monday.

Overall, spending on construction projects fell 0.6% in November, the Commerce Department said. This was close to consensus forecasts of Wall Street economists.

Adding to the sense of weakness in the report, there was another large downward revision to the prior month's data.

The government said spending fell 0.5% in October, compared with the initial
estimate of no change.

The trend of large revisions to the construction data in this recession has irked
economists.

Year over year, construction spending is down by 13.2% in November.

One area of strength in recent months -- spending on private housing -- fell 1.6% in November. The sector had been bolstered by the tax credit for first-time home buyers that sparked some home buying this fall. The tax credit has been extended until next June and broadened to include almost all home buyers.

Spending on private commercial construction projects fell slightly in November for the eighth consecutive monthly decline. Non-residential construction is down 20.6% in the past year.

Economists said that tight credit and the weak job market are two factors in a grim outlook for private nonresidential construction in 2010.

Overall private construction spending fell 0.7% in November after falling 0.8% in the previous month. Year-over-year private spending is down 20.0%.

Government public construction spending fell 0.4% after remaining flat in October. Government spending is up 2.7% over the past year as the government has been spending money trying to stimulate demand.

In a separate report, the Institute for Supply Management reported that its national manufacturing index rose to 55.9 in December from 53.6 in November.