US construction woes continue

Analysis of February 2010 construction spending shows few bright spots.

{reg} US construction numbers continue to struggle as key indicators are still on a downward slope, a report from IHS Global Insight said.

Patrick Newport, U.S. Economist for IHS Global Insight, took note of February numbers and concluded that the sector is still on da downturn despite government efforts to stimulate building activity.

Public construction fell for the 7^th straight month, while construction spending fell 1.3 percent in February. Excluding improvements, -spending fell 0.9% and single-family home construction slipped 0.2% after posting eight straight gains. Multi-family housing construction was flat.

Further, non residential construction continued to slide, shedding 0.4 %, while private construction and public construction were down 1.2% and 1.7%, respectively. December's estimate was revised down to minus 3.4% from -1.2%, and January's estimate was revised down to minus 1.4% from -0.6 %, the report said.

Newport's says construction spending fell more than 1% for the fourth straight month, as single-family construction spending dropped for the first time in nine months. Multiple-family construction remained stable.

Looking more closely at the private nonresidential construction spending category, Newport┬á reported that ÔÇØnearly every category in this sector is a meltdownÔÇØ with power being the one exception. That sector has showed sustained growth--up 9% since the same time last year. IHS Global Insight believes spending in the power sector is largely on alternative fuel sources.

It was noted that although money from the federal stimulus bill to finance infrastructure construction is being spent, but that money is not enough to offset overall infrastructure spending from declining, the report said. (/reg)