WASHINGTON – Spending on construction projects nationwide fell 0.6 percent in November compared with the month before, after dipping a smaller-than-previously thought 0.4 percent in October, the U.S. U.S. Commerce Department’s Bureau of the Census, Manufacturing and Construction Division reported today.

Increased spending on commercial and government projects helped offset a sharp decline in residential projects. The result was a month-over-month decline less than half as sharp as the 1.4-percent median projection from a Bloomberg News survey of 48 economists. (Their estimates for the November change in construction spending called for declines of 0.3 percent to 2.5 percent.)

Nonresidential construction spending – including both commercial and government projects – increased 1 percent compared with October, while total residential spending fell 4.1 percent.

Private construction spending fell 1.5 percent in November, however, as nonresidential construction spending edged up 0.7 percent compared with October but spending on private residential construction fell 4.2 percent– in the steepest month-over-month decline since July – after falling 2.1 percent the month before.

Compared with November 2007, U.S. construction spending fell 3.3 percent as spending on nonresidential construction rose 9.2 percent but residential construction spending fell 22.8 percent. Private construction spending fell 7.4 percent year-over-year, however, as a 10.3-percent rise in private nonresidential spending failed to offset the 23.4-percent decline in private residential spending.

“Construction still has more room to fall,” Ryan Sweet, an economist at Moody’s Economy.com Inc. in West Chester, Pa., told Bloomberg News. “Homebuilders are still cutting back, and the near-term outlook for public construction has also darkened,” as state and local budget deficits have grown. Ian Shepherdson, chief U.S. economists at High Frequency Economics LLC in Valhalla, N.Y., agreed. “The lead time for construction projects is long, and the credit crunch has not yet had time to make itself felt in full,” Shepherdson said.

Additional information – including the full “Construction Spending”(C30) report for November 2008 – is available from the U.S. Commerce Department’s Bureau of the Census, Manufacturing and Construction Division, at www.census.gov.