Construction spending fell 0.5 percent in December, its ninth consecutive decline, which helped limit outlays for the year to a meager 0.6 percent gain, the government has reported.
The Commerce Department said residential, non-residential and government construction spending totaled a seasonally adjusted annual rate of $415.1 billion, the lowest level since a $410.5 billion posting in January 1988.
The drop followed revised declines of 1.5 percent in November, even worse than the 0.6 percent decrease originally reported, and 0.1 percent in October. The department first said October spending had risen 0.3 percent.
For the year, spending totaled $434.9 billion, up from $432.1 billion in 1989.
But construction has been consistently on the skids since posting a 0.4 percent gain last March, wracked by tight credit, high vacancy rates and faltering consumer confidence because of the Persian Gulf crisis and a recessionary economy.
As a result, 28,000 construction jobs were lost in December, according to Labor Department statistics. And as a portent of things to come, it said the construction industry lost an additional 155,000 jobs, after seasonal adjustment, in January.
The department blamed some of the January loss on unusually bad weather at the first of the year, but also noted that construction jobs have now tumbled by 450,000 since last May.
Spending on residential buildings continued a two-year decline, falling 2.3 percent in December to an annual rate of $167.5 billion following a 3.2 percent decline a month earlier.
Single-family spending dropped 3.2 percent to $96.5 billion after falling 2.8 percent in November. Apartment building edged up 0.5 percent to $17.7 billion but failed to erase a 6.4 percent drop a month earlier.
Non-residential spending posted a 0.8 percent gain to $97 billion, due in part to a 7.1 percent increase in industrial building. This category had fallen 3 percent the previous month.
Government spending rose for the second straight month, up 1.1 percent to $115.2 billion on top of a 1.8 percent advance in November. The increase was paced by increases of 5.9 percent in educational buildings and 2.8 percent in street and highway construction.