The U.S. Commerce Department reports that construction spending edged up slightly in November, with the steep slump in housing offset by record spending on government and business projects, according to Engineering News Record.

At the same time, a key gauge of manufacturing activity fell in December to the lowest point in almost five years, indicating that the slowdown in housing and a credit crunch are having an impact on the overall economy.

The housing slump is the worst in more than two decades, following five boom years that pushed home sales and prices to record levels. Analysts believe the housing slowdown will last through much of 2008, forcing builders to slash construction plans to reduce a huge backlog of unsold homes.

The impact of the housing slump on the construction industry is cushioned somewhat by strength in government projects and non-residential activity, according to ENR.

Source: Engineering News Record