Homebuilding slump hampers construction
WASHINGTON (AP) - June 2, 2008 The Commerce Department reported that construction activity fell
by 0.4 percent in April after having been down 0.6 percent in
March. Construction has not increased since last September as the
building industry continues to be battered by the worst slump in
housing in decades.
Meanwhile, a key index of activity in the manufacturing sector
showed an unexpected increase in May. The Institute for Supply
Management's index of manufacturing activity edged up to 49.6 in
May compared to an April reading of 48.6.
Even with the increase, the manufacturing gauge remained just
below a reading of 50, the dividing point which indicates whether
manufacturing is in a recession.
Private residential housing construction dropped by 2.3 percent
last month, the 26th consecutive monthly decline. Private
non-residential activity, however, rose by a strong 1.6 percent,
pushing activity in this area to an all-time high as spending on
shopping centers, office buildings and hotels all showed big gains.
The 0.4 percent drop in overall construction was slightly
smaller than the 0.6 percent fall economists had been expecting and
the decline in March of 0.6 percent had originally been reported as
a larger 1.1 percent drop. Rising numbers of foreclosures are
dumping even more homes on the market.
The 1.6 percent rise in spending on non-residential projects
pushed activity in this area to a seasonally adjusted annual rate
of $388 billion.
Spending on state and local construction projects dipped 0.3
percent to a seasonally adjusted annual rate of $297.09 billion as
a 1.6 percent rise in federal construction was offset by a 0.5
percent drop in spending on state and local construction projects.