Special Report: Global Financial Crisis

    WASHINGTON, Dec. 1 (Xinhua) -- U.S. construction spending fell by 1.2 percent in October, larger than the 0.9-percent decline expected by analysts, the Commerce Department reported Monday.

    The big drop left total construction spending in October at a seasonally adjusted annual rate of 1.07 trillion dollars, or 4.6 percent below the year-ago level.

    Construction spending in September had been revised to 1.08 trillion dollars, up from the 1.06 trillion dollars initially reported.

    For October, spending on private construction was at a seasonally adjusted annual rate of 756.5 billion dollars, 2.0 percent below the revised September estimate of 771.9 billion dollars.

    Private builders cut back their spending on residential construction by 3.5 percent to a seasonally adjusted annual rate of 338.8 billion dollars in October.

    Spending by private builders on a range of nonresidential projects, including shopping centers, office buildings, hotels and motels, meanwhile, fell by 0.7 percent in October to an annual rate of 417.7 billion dollars.

    However, construction spending by the government rose by 0.7 percent to an annual rate of 316.1 billion dollars.

    During the first ten months of this year, U.S. construction spending amounted to 906.3 billion dollars, 5.7 percent below the level of the same period in 2007.

    The housing slump, which started in 2006 after having experienced white-hot five years, is likely to continue due to tight credit markets, souring consumer confidence in the overall economy and rising unemployment, many analysts believe.

    The nation's construction industry will be facing severe troubles until the second half of next year, they say.