Construction spending weak across the board

We just got a peak at construction spending in the month of October. Here's what the data showed:

* The overall decline in construction spending -- 0.8% -- was much worse than the 0.3% decline that economists polled by Bloomberg had expected. It compared to a rise of 0.2% in September.

* Residential spending tanked 2%, the sharpest drop since a similar 2% fall in July. Spending is off a hefty 15.8% from a year earlier. You don't need me to tell you this is the result of the housing market slowdown. With inventory levels high, builders are cutting back on the construction of residential property.

* Nonresidential spending is also decelerating. It rose just 0.1%, down sharply from September's 1.4% rise. That was the weakest reading since September 2006, when spending fell 0.6%. The deceleration was fairly widespread, with spending decelerating in the lodging, office, and health care sectors. I believe you're going to see more evidence of a commercial real estate industry slowdown as we go forward.