Rock Products

DEC 2018

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www.rockproducts.com ROCKproducts • December 2018 • 65 ECONOMICS the largest institutional building cat- egory, retreated 13 percent even with the September start of a $110 million engineering building at the University of Tennessee in Knoxville, Tenn. Large high school and middle school projects that reached groundbreak- ing in September were located in Euclid, Ohio ($85 million), Rockville, Md. ($69 million), and Springfield, Pa. ($68 million). Healthcare facilities fell 26 percent in September, following the 28 percent gain that was reported in August, and the public buildings category (detention facilities and court- houses) plunged 37 percent. The most noteworthy area of strength in September was the transportation terminal category, surging 153 percent, as the $700 million concourse expan- sion project at Denver International Airport was entered as a construction start. (The $650 million main terminal upgrade was entered as a construction start in July.) Also advancing in September was the amusement-related category, up 11 percent with the boost coming from the $220 million Lexington Convention Center expansion in Lexington, Ky., and the $89 million addition to the Milwau- kee Symphony Center in Milwaukee, Wis. Church construction starts were able to show improvement in Septem- ber, increasing 17 percent after very weak activity in August. Nonbuilding Construction Nonbuilding construction in Septem- ber was $156.5 billion (annual rate), down 13 percent. The decline was due mostly to the electric utility/gas plant category plummeting 76 percent. The largest power-related projects entered as September starts were consider- ably smaller in scale than in previous months, and included a $146 million power transmission line in the Las Vegas area, an $89 million solar power farm in Springfield, S.C., and a $50 million solar power installation in Ludlow, Vt. The public works categories as a group increased a slight 1 percent in Sep- tember from the previous month. On the plus side, the miscellaneous public works category rose 12 percent, and included the start of the $1.4 billion Arbuckle II pipeline (that will transport natural gas liquids from Oklahoma to Texas) and the $1.1 billion Cactus II pipeline system (that will transport crude oil from the Permian basin to the Corpus Christi, Texas, area). Water supply construction in Septem- ber advanced 15 percent, helped by the start of the $159 million Catskill Aque- duct repair and rehabilitation project in Catskill, N.Y. Both the river/harbor development and sewer construction categories showed reduced activity in September, decreasing 12 percent and 17 percent, respectively. On the down side, highway and bridge construction starts slipped 2 percent in September, easing back for the second month in a row after a 4 percent retreat in August. Despite the September dip, highway and bridge construction did include the start of the $1.2 billion I-70 East widening project in Denver. Through the first nine months of 2018, highway and bridge construction starts were up 7 percent at the national level, with the top five states ranked by the dollar amount of highway and bridge construction starts as follows – Texas, California, Florida, New York and Penn- sylvania. States ranked six through 10 were – Illinois, Ohio, North Carolina, Colorado and Virginia. Residential Building Residential building in September was $316.6 billion (annual rate), up 2 percent. Single-family housing rose 2 percent, rebounding slightly from a 5 percent drop in August, which had fol- lowed what was essentially an extended plateau from late 2017 through July. Multifamily housing in September grew 1 percent, although it was 18 percent below the strong volume reported in this year's first quarter. There were six multifamily projects each with a construction start cost of $100 million or more that reached groundbreaking in September, compared to eight such projects in August. The large multifamily projects in Sep- tember were led by the $132 million multifamily portion of a $150 million mixed-use project in Chicago (which is a conversion of the Chicago Tribune tower), the $125 million multifamily portion of a $160 million mixed-use building in Brooklyn, N.Y., and a $125 million townhouse complex in Cedar Grove, N.J. Year-to-Date Through the first nine months of 2018, total construction starts on an unadjusted basis were $599.9 bil- lion, down 1 percent from the same period a year ago. By geography, total construction starts during the first nine months of 2018 showed this behavior relative to a year ago – the Northeast, down 19 percent; the West, down 4 percent, the Midwest, up 1 percent; the South Atlantic, up 6 percent; and the South Central, up 12 percent. The 1 percent decline for total con- struction starts on an unadjusted basis during the January-Septem- ber period of 2018 was the result of a varied pattern by major sector. • Nonresidential building year-to- date dropped 7 percent, as a 15 percent increase for manu- facturing plant construction was outweighed by declines of 6 percent for commercial building and 11 percent for institutional building. • Nonbuilding construction year- to-date slipped 4 percent, as a 7 percent increase for public works was countered by a 49 percent slide for electric utilities/gas plants. • Residential building was the one major sector to see a year-to- date increase, rising 6 percent with single-family housing, up 7 percent; and multifamily housing, up 5 percent.

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