US construction spending plunges in January
US construction spending took its biggest nosedive in 14 years and manufacturing activity contracted fresh trouble signs for a struggling economy.
By Agencies |
WASHINGTON: US construction spending took its biggest nosedive in 14 years and manufacturing activity contracted fresh trouble signs for a struggling economy.
The Commerce Department reported Monday that construction spending plunged by 1.7% in January. Builders slashed spending on residential projects, but the weakness spread beyond that ailing sector. There were cutbacks in spending on, among other things, hotels and motels, highways and various projects by state and local governments.
���I think we���re in a self-reinforcing downward cycle,��� said Mark Zandi, chief economist at Moody���s Economy.com. Another report showed fallout from housing and credit problems cutting deeper into manufacturing. The Institute for Supply Management���s manufacturing index clocked in at 48.3 in February. That was the weakest reading in nearly five years.
A reading above 50 indicates expansion. Anything below that shows contraction. Still, the reading was a bit better than the 48.1 that economists were forecasting.On Wall Street, The Dow Jones industrials dropped 7.49 points to close at 12,258.90. The latest showing on construction activity was worse than economists were expecting.
They were forecasting a smaller decline of around 0.8 per cent.
The Commerce Department reported Monday that construction spending plunged by 1.7% in January. Builders slashed spending on residential projects, but the weakness spread beyond that ailing sector. There were cutbacks in spending on, among other things, hotels and motels, highways and various projects by state and local governments.
���I think we���re in a self-reinforcing downward cycle,��� said Mark Zandi, chief economist at Moody���s Economy.com. Another report showed fallout from housing and credit problems cutting deeper into manufacturing. The Institute for Supply Management���s manufacturing index clocked in at 48.3 in February. That was the weakest reading in nearly five years.
A reading above 50 indicates expansion. Anything below that shows contraction. Still, the reading was a bit better than the 48.1 that economists were forecasting.On Wall Street, The Dow Jones industrials dropped 7.49 points to close at 12,258.90. The latest showing on construction activity was worse than economists were expecting.
They were forecasting a smaller decline of around 0.8 per cent.
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