Construction spending declined by a record fall of 2.6 percent in 2007 as private builders cut their spending on residential projects by 18.3 percent, the biggest amount since 1993, the Commerce Department reported Friday. Total construction spending was 1.161 trillion dollars last year, down from 1.192 trillion dollars in 2006.

This is the biggest decline since 1994 having an 18.3% drop in residential projects as the primary reason. The 2007 drop in total construction spending by both private builders and government reversed the prior years’ trend of increases of 5.3 percent in 2006 and 10.6 percent in 2005. While nonresidential construction rose by 18.3 percent to 349.8 billion dollars in 2007.

Total private construction in 2007 accounted for 874.0 billion dollars, still 6.7 percent below the 2006 level.

Last year's public construction increased by 12.6 percent to 287.4 billion dollars. Educational construction was 81.8 billion dollars, 13.3 percent above the 2006 level and highway construction was 76.7 billion dollars, 7.3 percent above the 2006 level.

For the final month of 2007, total construction spending was estimated at a seasonally adjusted annual rate of 1.140 trillion dollars, down 1.1 percent from the year-ago level, the most in 15 months.

Spending on private construction was at a seasonally adjusted annual rate of 842.4 billion dollars, 1.0 percent below the revised November estimate of 850.8 billion dollars.

Construction spending by the government fell 1.5 percent in December to a seasonally adjusted annual rate of 297.8 billion dollars.

The housing market has experienced its worst slump in over two decades and is expected to continue amid a widening credit crisis stemming from troubles in the subprime mortgage market, where loans are given to homebuyers with weak credit histories.