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Construction activity falls to near-decade low

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Builders began work on fewer offices, shopping centers and other commercial projects in January, pushing construction spending down to near a decade low.

The Commerce Department said Tuesday that builders trimmed their activity 0.7 percent in January following a revised 1.6-percent decline in December.

The consecutive declines pushed total spending down to a seasonally adjusted annual rate of $791.8 billion in January, close to the decade low of $791.5 billion hit in August.

The current pace of construction activity is just about half of the $1.5 trillion level that economists believe would signal a healthy construction sector. They think it could be another four years before construction recovers to that level.

Builders have struggled with falling demand since the housing bubble burst, helping to push the country into the deep 2007-2009 recession. The recession lowered overall economic activity and that depressed demand for office buildings, hotels and shopping centers. In addition, banks tightened lending standards, making it harder for builders to get financing for projects.

For January, total private construction fell 1.2 percent, to a seasonally adjusted rate of $490 billion.

Housing activity rose 5.3 percent, to a rate of $245.6 billion, but private nonresidential construction dropped 6.9 percent, to a rate of $244.4 billion. The weakness in this area was led by an 18.2-percent drop in construction of hotels and motels. Spending on office buildings fell by 6 percent and the category that includes shopping centers was down 1.4 percent.

Government construction edged up 0.1 percent to an annual rate of $301.8 billion in January, supported by a 9.1-percent rise in federal projects, which climbed to an annual rate of $31.5 billion.

Construction by state and local governments fell 0.9 percent, to an annual rate of $270.4 billion. Building at the state and local level is being constrained by efforts to get control of large budget deficits.


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  1. Half of these comments make no sense really; Carmel (rolls eyes; everyone has this high regard but honestly I think people in Carmel are blind) IUPUI- shouldn't receive any accolades for parking garages (location and design wise) Indianapolis with a deteriorating circle center mall doesn't need another complex with the hope of retailers to come, we don't need twenty more CVS's and Starbucks'; I can fly to New York City and find a couple dead blocks; they exist so what...Indianapolis needs an actual downtown population to achieve more...that 120 million pay raise Mr Simon wants; maybe he should re-invest it in downtown Indianapolis..he is sure investing the company funds in Boston...

  2. Zionsville/Eagle Creek is a lovely area however there is one thing that it is severely lacking and that is mountain bike trails. The east side of the city has two wonderful trails available (Ft. Ben and Town Run) and both of these areas are undoubtedly better because of these two trails. Not only do these trails give these parks even more use (more money for the parks) but the people that use these trails are helping to preserve the park through trash pick-up, trail maintenance, and public education. Eagle Creek, it's time to catch up!

  3. DRT...

    Sorry for the confusion and poor wording on my part. There's no official indication that One America opposes retail.

    I was expressing my difficulty in imagining a reason for One America to oppose a more attractive mixed-use structure.

  4. this is an easy one, gambling casinos in all large hotels in the state. Invite in Donald Trump and all the casino owners from Las Vegas. Also, legalize the Indian tribes in Indiana to open casinos tax free. Rivers are a natural for this, the Wabash, the Tippecanoe, and the Ohio Rivers as gambling highways and Lake Michigan from Gary, Indiana. If this is an industry, which it is not, because it makes nothing, it redistributes wealth, instate and out of state. Maybe casinos attached to all shopping malls, Greenwood, Castleton, Keystone at the Crossing.

  5. The state can solve this easily, riverboat gambling in the Ohio River Indiana side, also, Indianapolis converts Union Station to a casino, that way central Indiana residents will not leave the state to gamble. Also, riverboat gambling in Gary , Indiana, Terre Haute, and all along the Wabash River from Lafayette to Terre Haute, to Vincennes. Riverboat tours and vacations as well.

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