WASHINGTON — Construction spending fell 2.5% in December to the lowest level in more than a decade, and the November tally was also revised downward, in a Commerce Department report released Tuesday.

Economists expected construction spending to be unchanged in December, according to the median estimate from Thomson Reuters. The November reading was revised to a 0.2% decline from the previously reported gain of 0.4%.

The overall level of construction spending, which was $787.9 billion on a seasonally adjusted basis in December, was the lowest since July 2000.

“This looks a little closer to reality than initial reports which consistently surprised on the upside in the fourth quarter,” said Diane Swonk, chief economist at Mesirow Financial. “Total construction spending fell 10.3% last year compared to 2009.”

Private construction dropped 2.2%, reversing three consecutive monthly increases. Private residential construction plummeted 4.1%, the largest decline since August.

Swonk said builders are struggling with persistently tight lending conditions. Those in the residential sector also face extremely tough competition from the existing home market.

“Losses were broad-based and spread across both the private and public sectors,” she said. “Unusually harsh winter storms, particularly on the East Coast, no doubt contributed to, but did not create, the weakness we are seeing. Look for construction activity to remain weak in January, with freak snow storms and weak, underlying demand to continue holding back spending.”

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