Construction Spending Level Tumbled in January from Upwardly Revised December Total

Construction spending snapped a nine-month string of monthly gains with a sharp decline in January but still rose from year-ago levels, according to an analysis of new Census Bureau data by the Associated General Contractors of America. Association officials cautioned that “across-the-board” federal spending cuts known as sequestration, which took effect today, along with a possible shutdown of the federal government later this month, could hit construction harder than most sectors and dampen demand for needed projects. “At first glance, January was a bad month for construction, with a sharp drop in private nonresidential spending, along with small dips in residential and public construction,” said Ken Simonson, the association's chief economist. “However, the January figure was higher than the year-ago level. Moreover, steep upward revisions today in the preliminary numbers for November and December suggest January may ultimately prove to have been positive, as well.” Read the full press release here.