Construction spending at four-year low

U.S. construction spending dropped in January to its lowest level in more than four years, according to a government report on Monday, dragged down by the residential slump.

The Commerce Department said spending on construction projects dropped 3.3% to a seasonally adjusted annual rate of $986.2 billion, the lowest since June 2004, after tumbling 2.4% the previous month.

Analysts polled by Reuters were expecting a 1.5% decline in overall construction spending in January. Compared to the same period a year ago, construction spending dived 9.1%.

Private residential spending, at the heart of the U.S. economic contraction, fell 2.9% in January after December's 4.4% drop. Compared to the same period last year, spending was down 28%. The level of spending, at a $291.5 billion rate, was the lowest in more than 10 years.

Spending in the nonresidential private sector on a range of structures from factories, lodging, offices and power plants fell 4.3% in January, versus a 1.2% decline the previous month.