Rock Products

OCT 2016

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www.rockproducts.com ROCK products • October 2016 • 49 Economics construction strengthened 75 percent, due to the start of a $340 million trade and logistics center as part of the rede- velopment of the Oakland Army Base in Oakland. Office construction improved 3 percent following its 21 percent increase in July, supported by the $194 million office portion of a $300 million bank opera- tions center in Plano, Texas, and a $96 million office building in Herndon, Va. Store construction was the one com- mercial project type that did not report an August gain, as it held steady with its July pace. The institutional side of the nonresi- dential building market increased 24 percent in August. The amusement and recreational category jumped 118 percent, reflecting the $975 million estimated for the casino portion of the Wynn Casino. Transportation terminal work climbed 30 percent, pushed upward by the start of a $508 million upgrade to the North Satellite Terminal at Seattle-Tacoma International Airport. Educational facil- ities, which is the largest institutional category, grew 18 percent in August with the lift coming from the start of a $124 million life sciences building at the University of Washington in Seattle and a $118 million high school in the Dallas area. Healthcare facilities increased 15 per- cent, featuring five projects valued at $100 million or more, led by a $300 million medical center expansion in St. George, Utah, and a $271 million hospital in Rockford, Ill. The religious buildings category managed to grow 16 percent in August from a subdued July, while the public buildings category (courthouses and detention facilities) fell 11 percent. Nonbuilding Construction Nonbuilding construction, at $152.7 bil- lion (annual rate), increased 25 percent in August. The public works categories together rose 36 percent, with most of the gain coming from a 326 percent hike for the miscellaneous public works category that includes pipeline work. August featured the start of the $3.0 billion Sabal Trail and Florida South- east Connection natural gas pipeline upgrade project, which will transport natural gas from Alabama through Georgia and into Central Florida. If this massive project is excluded from the August data, the gains for the miscel- laneous public works category and the public works group would have been 64 percent and 1 percent, respectively, while nonbuilding construction would have been down 4 percent. Highway and bridge construction in August rose 5 percent, with major con- struction starts led by a $163 million tolled express lanes project in Denver and a $110 million realignment of State Route 99 in Fresno, Calif. River/harbor development work in August grew 8 percent, but considerable declines were reported for water supply systems, down 35 percent; and sewer construc- tion, down 43 percent. The electric utility and gas plant category fell 31 percent in August, weakening for the third straight month, although August did include the start of a $573 million power transmission line in Illinois and a $156 million wind farm in upstate New York. Residential Building Residential building in August advanced 5 percent to $291.1 billion (annual rate). Multifamily housing strengthened for the second month in a row, rising 25 percent after its 10 percent gain in July. August featured 13 multifamily projects valued at $100 million or more, led by the $780 million multifamily portion of the $900 million Wanda Vista Tower in Chicago, a condominium-hotel-retail project, which at 93 stories will be the third tallest building in Chicago once it is completed. Other large multifamily projects that reached groundbreaking in August were the $465 million Transbay Block 8 building in San Francisco, the $344 million multifamily portion of a $375 million mixed-use building at 1120 South Grand Avenue in Los Angeles, and the $266 million multifamily portion of the $300 million Miami Worldcenter 7th Street development in Miami. Year-to-Date Through the first eight months of 2016, total construction starts on an unad- justed basis were $439.3 billion, down 7 percent from a year ago. As 2016 is proceeding, the year-to-date decline for total construction is becoming smaller, affected to a lesser extent by the comparison to the massive projects reported during the first half of 2015 and now benefitting from the start of several massive projects in this year's second half. If projects valued at $1 billion or more are excluded, total construction starts during the first eight months of 2016 would be down a slight 1 percent, or essentially even, with a year ago. The 7 percent drop for total construction starts on an unadjusted basis during the first eight months of 2016 was the result of declines for both nonbuilding construction and nonresidential building compared to a year ago. • Nonbuilding construction fell 17 percent year-to-date, with public works, down 8 percent and electric utilities/gas plants, down 34 percent. • Nonresidential building decreased 10 percent year-to-date, with commercial building, down 1 percent; institutional building, down 8 percent; and manu- facturing building, down 45 percent. • Residential building continued to be the one major sector reporting a year-to- date gain, increasing 3 percent with single family housing up 7 percent while multifamily housing receded 4 percent. By major region, total construction starts during the first eight months of 2016 showed this performance compared to a year ago – the Midwest, up 5 percent; the South Atlantic, up 4 percent; the West, unchanged; the Northeast, down 12 percent; and the South Central, down 25 percent.

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