U.S. economic downturn hits construction industry

Reports from the U.S. say the construction industry in that country is being hit hard by the declining availability of commercial loans, and a slowing demand throughout the economy.
The U.S. Commerce Department reported that in January construction spending had its sharpest decline in 14 years. Spending on residential construction was already at low levels last year, but that effect had been compensated for by strong non-residential construction. However, commercial and government projects are now being effected by the economic slowdown. The Commerce Department reported spending was down 3.3% in January compared to December. Some are calling the situation in the U.S. as verging on a recession.
The Los Angeles Times reported that Kenneth Simonson, the chief economist for the Associated General Contractors of America, was predicting 2008 would be “significantly worse for the construction industry than 2007.”
Simonson said in the LA Times interview, “I think you’ll see much grimmer figures this year. The brightest parts of the industry will be large projects such as power plants, refineries, cellphone towers and hospital and university buildings.”
The construction industry represents 9% of the U.S. gross domestic product.
The Canadian Construction Association predicted that Canada would see another year of strong growth in the construction industry in a report released December 18, 2007. It suggested a growth rate of 3.1 per cent in 2008, compared to a 3.5% growth rate in 2007.