Construction drops slightly in June

By |  July 23, 2013

New construction starts in June receded 1 percent to a seasonally adjusted annual rate of $489.5 billion, according to McGraw-Hill Construction. As a result, construction start stats produced a Dodge Index reading of 104 – down one point from May.

Nonresidential building lost momentum after strengthening during the previous two months, and housing experienced a pause from its recent upward trend. Nonbuilding construction, meanwhile, advanced in June. The start of several very large bridge projects lifted the category.

For the first six months of 2013, total construction starts on an unadjusted basis were reported at $233.8 billion – down 2 percent from the same period one year ago. The 2013 year-to-date decline for total construction was due primarily to a sharp reduction for electric utilities compared to a robust first half of 2012, according to McGraw Hill Construction.

“The first half of 2013 revealed a mixed performance by project type, producing a hesitant pattern for total construction starts,” says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “On the plus side, the housing market continues to strengthen, and it should be able to register further gains this year even with the recent hike in mortgage rates. Commercial building continues to slowly advance, and public works construction to this point has not seen much dampening as the result of the sequester.

“However, on the negative side, the retreat for institutional building has turned out to be steeper than expected; manufacturing plant construction has weakened; and new electric utility starts have plunged from last year’s record pace. Assuming the downward pull from the negative sectors in this year’s first half becomes less severe in the second half, then total construction starts for all of 2013 should still be able to register growth, but at just a single-digit pace in similarity to 2012.”

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Kevin Yanik is editor-in-chief of Pit & Quarry. He can be reached at 216-706-3724 or

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