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US construction spending continues to drop

Construction spending in the US fell dropped by 1.2 per cent in October according to a Commerce Department report, much bigger than the 0.9 per cent decline many analysts expected.

The drop comes as another indication that the faltering economy and credit crisis are likely to persist

The construction weakness was compounded by another sizable drop in home building, which has fallen every month but two over the past two and a half years.

Economists poll by Reauters believe the construction industry will be facing severe troubles until an economic recovery is firmly launched, probably not until the second half of 2009.

The current economic slump is being worsened by the most serious financial crisis to hit the country since the 1930s as banks struggle to deal with billions of dollars of loan losses.