Construction gets a boost in June

By |  July 22, 2014

New construction starts in June advanced 6 percent to a seasonally adjusted annual rate of $549.7 billion. That’s the highest level so far in 2014, according to McGraw Hill Construction, a division of McGraw Hill Financial.

Nonresidential building strengthened after pulling back in May, with a lift coming from the start of several large manufacturing plant projects. Modest gains in June were also reported for housing and nonbuilding construction.

Total construction starts on an unadjusted basis were $254.1 billion for the first six months of the year – up 1 percent from the same period a year ago. June’s data raised the Dodge Index to 116, up from 109 in May.

According to McGraw Hill Construction, the index averaged a sluggish 104 during the first two months of 2014. The pace of construction starts picked up, though, as the index averaged 112 over the next four months.

“The first half of 2014 revealed a mixed performance by project type,” says Robert Murray, chief economist for McGraw Hill Construction. “Single-family housing stands out as the biggest surprise on the negative side, as its upward trend present for much of 2012 and 2013 has stalled for now.

“Public works and electric utilities are seeing generally decreased activity, as expected. On the positive side, multifamily housing is still proceeding at a healthy clip, and commercial building continues to move hesitantly upward, with office construction this year providing most of the support. Manufacturing-related construction surged in the first half of 2014, boosted by the start of several massive chemical plants and refineries, while the institutional building sector is still trying to make the transition from lengthy decline to modest growth.”

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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