Construction spending fell for a fifth straight month in February as another big drop in home building offset a slight rebound in nonresidential construction.
The Commerce Department said Wednesday that February construction activity dropped 0.9 percent, less sharply than the 1.5 percent decline economists expected. Total construction has been falling since October. The level of activity is at the slowest pace in nearly five years.
The weakness in February reflected a 4.3 percent drop in housing construction, which pushed the level down to the lowest in 11 years.
Home builders have cut back sharply, but face a rising glut of unsold homes as record mortgage foreclosures dump more properties on the market. Lennar Corp. said Monday that its fiscal first-quarter losses surged 77 percent due to charges to adjust land and inventory values, and plunging home deliveries and new orders.
The construction report showed non-residential construction rose 0.3 percent in February, a slight rebound following a 4.3 percent drop in January which had been the biggest decline in 15 years.
With the financial sector facing its worst crisis in seven decades, banks have tightened their loan standards, making it harder to get financing for shopping centers and other commercial projects.
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