US construction spending unexpected fell 0.4 per cent in December led by a ninth straight drop in private residential building that ran against all time highs in non-residential and public construction, a government report said today.
Construction spending fell to a seasonally adjusted annual rate of $1.178 trillion, from $1.183 trillion in November, the Commerce Department said. For the full year, spending hit $1.198 trillion, up 4.8 per cent from $1.144 trillion in 2005. Private residential construction for the year was down 1.9 per cent.
The report was weaker than economists had anticipated. Wall Street forecasters had expected construction spending to rise 0.1 per cent in December after dropping a revised 0.1 percent the prior month.
Private construction spending in December fell 0.8 per cent to $896.8 billion, with residential construction down 1.6 per cent to $582.3 billion, while non-residential building increased 0.9 per cent to $314.5 billion.
December's fall in home building ran against other recent data pointing to a stabilizing home construction market. Last week the government reported the pace of US housing starts climbed 4.5 per cent in December, well above expectations and boosted by warm weather.
But for all of 2006 the rate of new home building posted the biggest decline in 15 years. Spending in public construction projects rose 0.6 per cent to $280.9 billion in December - an all time high. State and local construction rose 1.2 per cent to $261.8 billion, also a record high, while federal construction fell 6.4 per cent to $19.1 billion.