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April construction advances 3 percent

By |  May 21, 2014

New construction starts in April rose 3 percent to a seasonally adjusted annual rate of $533.7 billion, according to McGraw Hill Construction, a division of McGraw Hill Financial. The increase maintained the upward movement established in March, which followed sluggish activity at the outset of 2014.

By major sector, April gains were reported for nonresidential building and housing, while nonbuilding construction retreated.

Through the first four months of 2014, total construction starts on an unadjusted basis came in at $153.8 billion – unchanged from the same period a year ago. April’s data raised the Dodge Index to 113 – up from 110 in March and 102 during the first two months of 2014.

For the full year 2013, the Dodge Index was reported to be 112, so April’s increase brings activity back up to a level slightly above last year’s average monthly pace.

“With construction starts now climbing for two months in a row, it’s become more apparent that some of the lackluster activity in early 2014 was due to tough winter weather conditions,” says Robert Murray, chief economist for McGraw Hill Construction. “On the plus side, nonresidential building is strengthening once again, after slipping in recent months. The commercial and manufacturing categories are regaining momentum, while institutional building is making the transition to an up-and-down pattern after its steady decline over the past five years. Multifamily housing continues to move at a good clip.

“On the down side,” Murray continues, “this year’s total construction volume is being restrained by a more subdued pace for public works, given the comparison to last year’s elevated amount and the uncertain prospects for getting new transportation legislation passed. Another cautionary note is related to single-family housing, which through the first four months of 2014 had yet to move beyond the modest erosion that emerged toward the end of last year.”

Kevin Yanik

About the Author:

Kevin Yanik is the editor-in-chief of Pit & Quarry magazine. Yanik can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

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