Rock Products

JUL 2017

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www.rockproducts.com ROCK products • July 2017 • 55 ECONOMICS Campus in Fort Worth, Texas, and the $166 million General Electric Global Headquarters Building in Boston. The other commercial categories showed growth in May. Warehouse construction climbed 17 percent, lifted by the start of a $160 million Amazon fulfillment center in the Houston area and an $84 million FedEx distribution center in the Worcester, Mass., area. Store construction advanced 16 percent with the help of a $200 million shop- ping center shell in Norwalk, Conn. Hotel construction increased 11 per- cent, reflecting the start of a $118 million Hilton hotel in Myrtle Beach, S.C., and a $116 million hotel in Mon- ticello, N.Y. The commercial garage category rose 7 percent in May. Man- ufacturing plant construction jumped 22 percent, lifted by the start of a $975 million chemical plant expansion in Louisiana, a $385 million polyethylene plant in Texas, and a $120 million research lab upgrade in Colorado. Institutional building retreated 4 per- cent in May. Education facilities, the largest nonresidential building cat- egory by dollar volume, dropped 21 percent after registering a 12 percent gain in April. Even with the decline, there were several noteworthy educa- tional facility projects in May, including a $100 million science and engineering center at Union College in Schenectady, N.Y.; a $93 million engineering build- ing at the University of Rhode Island in Kingston, R.I.; a $76 million dentistry education facility at Texas A&M Uni- versity in Dallas; and a $75 million high school in the Raleigh, N.C., area. Declines were also reported for reli- gious buildings, down 10 percent; and the amusement category, down 36 per- cent; although the latter did include the start of the $127 million Buddy Holly Hall of Performing Arts and Sciences in Lubbock, Texas. On the positive side, healthcare facilities climbed 38 percent in May with the help of five projects valued at $100 million or more, led by the $442 million Marcus Tower at Piedmont Hospital in Atlanta and a $265 million University of Colo- rado hospital in the Denver area. The public buildings category advanced 51 percent from a lackluster April, reflect- ing the start of $125 million detention facility in Phoenix, while the transpor- tation terminal category posted a 23 percent gain in May. Residential Building Residential building was $284.9 billion (annual rate) in May, down 4 percent. Multifamily housing retreated 10 percent following increases over the previous two months that saw activity rise 20 percent. There were seven mul- tifamily projects valued at $100 million or more that reached groundbreaking in May, led by a $450 million multifamily high-rise in lower Manhattan, N.Y., the $200 million multifamily portion of a $240 million multifamily/hotel mixed- use high-rise in Chicago, and a $200 million multifamily high-rise in Boston. In May, the top five metropolitan areas in terms of the dollar amount of multi- family starts were the following – New York, Los Angeles, Philadelphia, Chicago and Boston. Single-family housing settled back 2 percent in May, with its upward track pausing for the third month in a row after showing steady growth during the fourth quarter of 2016 and the first two months of 2017. By major region, single family housing in May revealed this per- formance – the West, down 7 percent; the Midwest, down 5 percent; the South Atlantic, up 1 percent; the South Cen- tral, up 2 percent; and the Northeast, up 4 percent. One plus for single family housing going forward is the recent retreat in the cost of financing, with the 30-year fixed mortgage rate slipping to 3.9 percent in early June, after reaching 4.3 percent in late 2016. Through the first five months of 2017, total construction starts on an unadjusted basis were $274.3 billion, down 5 percent from the same period a year ago. If the volatile manufacturing plant and electric utility/gas plant categories are excluded, total construction starts during the first five months of 2017 would be up 2 percent relative to last year. The 5 percent decline for total construction starts on an unadjusted basis during the first five months of 2017 was due to a varied pattern by major sector. • Nonbuilding construction fell 25 percent year-to-date, with electric utilities/ gas plants down 67 percent while public works construction was down just 3 percent. • Nonresidential building grew 5 percent year-to-date, with institutional build- ing, up 17 percent; commercial building, down 5 percent; and manufacturing building, down 9 percent. • Residential building year-to-date was flat, with single family housing up 8 percent while multifamily housing decreased 17 percent. By geography, total construction starts in the January-May period of 2017 showed this behavior – the Midwest, down 18 percent; the South Central, down 14 percent; the Northeast, down 3 percent; the West, unchanged; and the South Atlantic, up 8 percent. Additional perspective comes from looking at 12-month moving totals, in this case the 12 months ending May 2017, versus the 12 months ending May 2016. On this basis, total construction starts were up 3 percent. By major sector, non- building construction fell 12 percent, with electric utilities/gas plants down 41 percent while public works slipped 2 percent. Nonresidential building increased 14 percent, with manufacturing building, up 20 percent; institutional building, up 16 percent; and commercial building, up 11 percent. Residential building grew 3 percent, with single family housing up 7 percent while multifamily housing fell 6 percent. Year-To-Date

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