Construction Spending Falls for 3rd Month

Construction spending declined for a third straight month in March, the first time building activity has shown such weakness since right before the start of the last recession, the government reported today.

The Commerce Department said spending on projects dropped 0.3% in March, following even larger declines of 0.8% in February and 0.7% in January.

The new decline, which pushed activity down to a seasonally adjusted annual rate of $413.5 billion, represented the first time construction spending has fallen for three consecutive months since a string of five in a row from February through June of 1981 before the start of the 1981-82 recession.

Economists have been looking for building activity to be weak this year because of the campaign by the Federal Reserve to push interest rates higher as a way of fighting inflation by dampening economic activity.