WASHINGTON - Builders began work on fewer homes, shopping centers and other projects in 2010, pushing total building activity down to the lowest point in a decade.

Construction spending dropped 10.3 percent last year, marking the fifth annual decline, the Commerce Department said Tuesday. It fell to $814.18 billion in 2010, the lowest level since 2000.

And the year ended on a weak note. Builders started fewer homes and other projects in December, pushing activity down 2.5 percent for the month.

Builders have struggled with falling demand since the housing bubble burst, triggering a deep recession. The downturn sharply lowered overall economic activity and that cut into demand for office buildings, hotels and shopping centers.

For 2010, home construction fell 1.7 percent and nonresidential projects plunged 23.3 percent. Spending for the category that includes shopping centers dropped 26 percent.

Government projects slid 2.7 percent, likely reflecting the budget squeeze affecting many states and cities.

The December drop in construction left spending at a seasonally adjusted annual rate of $787.9 billion, the lowest monthly level since July 2000. That surpassed the previous low hit in August and underscored that conditions in the building industry remain extremely weak.

For the month, builders spent 4.1 percent less for residential projects. Work on nonresidential projects dropped 0.5 percent, with work on hotels and shopping centers both declining.

Builders have had trouble obtaining financing for projects since the recession began. Banks have tightened lending standards in response to higher default rates.

Spending on government projects fell in December 2.8 percent. State and local spending dropped 1.8 percent and spending by the federal government plunged 11.6 percent to the lowest level since October 2004.

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