September construction climbs 13 percent

By |  October 18, 2013

New construction starts in September advanced 13 percent to a seasonally adjusted annual rate of $556 billion, according to McGraw-Hill Construction, a division of McGraw Hill Financial. Nonresidential building bounced back after losing momentum in August, and the nonbuilding construction sector was lifted by the start of several large power plants, which ran counter to the sharply downward trend for electric utilities that’s been present during 2013.

For the first nine months of 2013, total construction starts on an unadjusted basis were reported at $379.3 billion – up 2 percent from the same period a year ago. If electric utilities are excluded from the year-to-date statistics, total construction starts in the first nine months of 2013 would be up 11 percent.

The September data raised the Dodge Index to 118 – up from 104 in August and the highest reading for the index so far in 2013. From January through August this year, the index hovered within the fairly narrow range of 98 to 107.

Nonresidential building in September jumped 24 percent to $182.8 billion. The manufacturing plant category soared 289 percent. Institutional building in September advanced 24 percent, rebounding after a 17 percent decline in August. The healthcare facilities category, which has been lackluster for much of 2013, jumped 144 percent, and the educational building category in September grew 13 percent.

Nonbuilding construction, at $169.9 billion, increased 33 percent in September. Electric utility construction surged 466 percent after a weak August, departing from the declining trend experienced during most of 2013.

Residential building in September dropped 6 percent to $203.2 billion. Multifamily housing fell 14 percent, pulling back after rising by the same percentage during August.

The 2-percent gain for total construction starts on an unadjusted basis during the January-to-September period of 2013 reflected a mixed pattern by the three main construction sectors. Nonresidential building matched the amount reported during last year’s first nine months, due to this behavior by segment – commercial building, up 9 percent; manufacturing building, up 1 percent; and institutional building, down 5 percent. Nonbuilding construction year-to-date fell 20 percent, as a 63 percent plunge for electric utilities far outweighed a slight 2 percent gain for public works. Residential building advanced 26 percent year-to-date, with single-family housing up 29 percent and multifamily housing up 17 percent.

By geography, total construction starts during the first nine months of 2013 showed gains in three of the five major regions – the Northeast, up 13 percent; the West, up 7 percent; and the Midwest, up 6 percent.

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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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