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Construction spending plunges

WASHINGTON — Construction spending in January took its biggest nosedive in 14 years, as problems spread beyond the ailing home-building sector.

The Commerce Department reported today that spending plunged by 1.7 percent. Although builders slashed spending on residential projects, the weakness was fairly widespread. There were cutbacks in spending on, among other things, hotels and motels, highways and various projects by state and local governments.

The latest showing on construction activity was worse than economists were expecting. They were forecasting a smaller decline of around 0.8 percent.

The 1.7 percent plunge in total construction spending came after a 1.3 percent decline in December. It was the largest drop since January 1994, when construction spending plummeted by 3.6 percent.

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