Rock Products

NOV 2017

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www.rockproducts.com ROCK products • November 2017 • 47 The value of new construction starts in September soared 14 percent from the previous month to a seasonally adjusted annual rate of $814.8 billion, according to Dodge Data & Analytics. Highway and bridge construction descended 6 percent. The nonresidential building sector strengthened for the second month in a row, climbing 37 percent with the boost coming from the start of a $6.0 billion ethane cracker plant in western Penn- sylvania plus two projects in New York – the $4.0 billion Delta Airlines new ter- minal facility at LaGuardia Airport and the $1.7 billion 50 Hudson Yards office tower in Manhattan. Residential building in September edged up 1 percent, as both single-family and multifamily housing registered modest gains. Running counter in September was a 3 percent drop for nonbuilding construction, with decreased activity for its public works segment. "The pattern of construction starts on a monthly basis has occasionally been subject to 'spikes,' due to the presence of unusually large projects in a given month, and September certainly qual- ifies as one of those monthly spikes," stated Robert A. Murray, chief econ- omist for Dodge Data & Analytics. "Looking at the data on quarterly basis helps to ease the volatility present in the monthly statistics, and it shows the third quarter rebounding 8 percent after a 9 percent decline in the second quarter, returning the level of activity to within 2 percent of the strong pace achieved during the first three months of this year. As the current expansion for construction has matured, there's been more of an up-and-down pattern on a quarterly basis, including what's been reported so far during 2017. What does stand out about the construction industry in 2017 is the strength shown by nonresidential building, led by such institutional project types as trans- portation terminals and educational facilities. On the commercial side, office buildings and warehouses continue to see growth, although hotel construc- tion appears to have peaked and store construction has generally weakened. And, with this year's pickup in petro- chemical plant starts, following a steep two-year decline, the manufacturing building category is no longer exerting a downward pull on the nonresidential building total." Nonresidential Building Nonresidential building in September was $368.8 billion (annual rate), a 37 percent gain compared to its August amount. The manufacturing building category surged 490 percent from sub- dued activity in August, boosted by the $6.0 billion ethane cracker facility in Monaca, Pa., in close proximity to the Marcellus shale gas field. The next larg- est manufacturing project in September was a $280 million poultry processing plant in Fremont, Neb. The institutional building categories as a group climbed 25 percent in Sep- tember, led by a 145 percent hike for transportation terminal work. The $4.0 billion new terminal facility for Delta Airlines at New York City's LaGuardia Airport, which will replace Delta's C and D Terminals, joins the $3.4 billion Central Terminal Building project at LaGuardia Airport that was entered as a January 2017 start. Through the first nine months of 2017, airline terminal construction starts have totaled $14.0 billion, almost five times what was reported during the same period of 2016. Educational facilities, the largest non- residential building category by dollar amount, increased 14 percent in Sep- tember. There were 10 educational facility projects valued at $100 million or more that reached groundbreaking in September, including a $243 million neuroscience building at the University of California San Francisco, the $200 million renovation of the Mid-Manhat- tan Library in New York, and a $150 million high school in Germantown, Md. Healthcare facilities in September retreated 2 percent, although the latest ECONOMICS MONTHLY CONSTRUCTION STARTS (Seasonally Adjusted Annual Rates, In Millions of Dollars) Sept. 2017 Aug. 2017 % Change Nonresidential Building $368,818 $269,799 +37 Residential Building $298.942 $294,906 +1 Nonbuilding Construction $147,071 $151,367 -3 TOTAL Construction $814,831 $716,072 +14 New Construction Starts Jump 14 Percent in September Public Works Falls 6 Percent; Highway and Bridge Construction Descends 6 Percent. By Mark S. Kuhar

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