Rock Products

JAN 2019

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64 • ROCK products • January 2019 New construction starts in October climbed 21 percent to a seasonally adjusted annual rate of $864.0 billion, according to Dodge Data & Analyt- ics. The substantial increase followed three straight months of decline, during which the pace of total construction starts fell 22 percent from the excep- tionally strong volume ($896.3 billion) reported back in June. Highway and bridge construction starts climbed 26 percent Nonresidential building in October surged 53 percent, as several very large projects lifted the manufacturing plant, office building, and transporta- tion terminal categories. Nonbuilding construction in October advanced 14 percent, supported by growth for public works while the electric utility/ gas plant category bounced back from depressed activity in September. Residential Building Residential building in October edged up a slight 2 percent, helped by improvement for multifamily housing. During the first ten months of 2018, total construction starts on an unad- justed basis were $679.1 billion, up 1 percent from the same period a year ago. The year-to-date gain for total construction starts was restrained by a 45 percent slide for the electric utility/ gas plant category. If the electric util- ity/gas plant category is excluded, total construction starts during the first ten months of 2018 would be up 3 percent relative to the same period a year ago. "During 2018, the presence of very large projects in a given month has played a considerable role in shaping the monthly pattern of activity, and in October it was nonresidential building that especially benefitted from the start of very large projects," stated Robert A. Murray, chief economist for Dodge Data & Analytics. "These included a $2.4 bil- lion petrochemical plant in Texas, the $1.4 billion Terminal One building at Newark Liberty International Airport, the $860 million expansion to the Las Vegas Convention Center, a $750 mil- lion Facebook data center in Utah and a $655 million concourse expansion at Denver International Airport that's part of that facility's extensive upgrade. Earlier, decreasing construction starts for nonresidential building during this year's third quarter raised some concern, suggesting that this sector may have already peaked and is now in decline. The strong October perfor- mance indicates that nonresidential building construction starts continue to proceed at an elevated pace, at least for the present." Nonresidential Building Nonresidential building in October was $358.3 billion (annual rate), up 53 percent from September's lackluster amount. After registering heightened activity in June, led by the start of a $6.5 billion uranium processing plant in Oak Ridge, Tenn., and the $1.8 billion Spiral office tower in New York, non- residential building retreated for three consecutive months before October's upturn. Manufacturing plant construction in October jumped 189 percent, boosted by the start of a $2.4 billion propylene oxide and tertiary butyl alcohol plant in Channelview, Texas, and a $1.6 billion natural gas processing plant in Douglas, Wyo. Additional manufacturing plant projects included as October starts were a $400 million wood products plant in Lexington, N.C., a $400 million natural gas processing plant in Watford City, N.D., and a $320 million biofuel refinery in Lakeview, Ore. The commercial building structure types as a group increased 48 per- cent in October, strengthening after declines during the previous three months. New office construction starts in October climbed 123 percent, led by a $750 million Facebook data center in Eagle Mountain, Utah. There were eight additional office projects valued at $100 million or more that reached groundbreaking in October, including the $644 million office portion of the $1.3 billion Winthrop Square Tower in Boston, the $475 million office portion of the $600 million Marriott headquar- ters and hotel in Bethesda, Md., and the $267 million office portion of a ECONOMICS MONTHLY CONSTRUCTION STARTS (Seasonally Adjusted Annual Rates, In Millions of Dollars) Oct. 2018 Sept. 2018 % Change Nonresidential Building $358,327 $233,792 +53 Residential Building $321,677 $316,592 +2 Nonbuilding Construction $183,964 $161,159 +14 TOTAL Construction $863,968 $711,543 +21 October Construction Starts Soar 21 Percent Nonresidential Building in October Surged 53 Percent; Highway and Bridge Construction Starts Climbed 26 Percent. By Mark S. Kuhar

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