Rock Products

MAR 2019

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58 • ROCK products • March 2019 ECONOMICS Residential building in December was $300.6 billion (annual rate), down 8 percent from the previous month. Mul- tifamily housing retreated 15 percent, slipping for the second month in a row after a 19 percent gain in October. There were four multifamily projects valued at $100 million or more that reached groundbreaking in Decem- ber, compared to 10 such projects in November. The large multifamily proj- ects in December were led by a $265 million apartment building in Oakland and a $150 million apartment building in Long Beach, Calif. Single-family housing in December dropped 5 percent, settling back from the extended plateau that was present for much of 2018. The December pace for single-family housing was down 7 percent from the average dollar volume for the previous 11 months. Nonbuilding construction in Decem- ber was $165.5 billion (annual rate), down 9 percent from the previous month. The electric utility/gas plant category plunged 74 percent from its improved amount of construction starts in November, which included a $3.0 billion liquefied natural gas export terminal in the Corpus Christi, Texas area. The largest electric utility/gas plant projects entered as December construc- tion starts were a $500 million solar power plant in Georgia, a $303 million wind power plant in Oregon, and a $300 million wind farm in South Dakota. In contrast, the public works categories in December rebounded 26 percent after sliding 29 percent in November. Highway and bridge construction in December climbed 19 percent, helped by the start of the $360 million I-40 improvement project in the Raleigh, N.C., area. The miscellaneous public works cat- egory (which includes site work, pipelines, and mass-transit proj- ects) surged 80 percent in December, boosted by the $500 million Dominion natural gas pipeline in West Virginia and Pennsylvania. The environmental public works categories posted gains in December, with sewer construction, up 26 percent; river/harbor develop- ment, up 8 percent; and water supply construction, up 4 percent. For 2018 as a whole, total construction starts increased a slight 0.3 percent to $789.0 billion, according to Dodge Data & Analytics. This came after 7 percent gains in both 2016 and 2017, as well as 11 percent to 14 percent gains from 2012 through 2015. The 2018 increase for total construction starts was restrained by a 31 percent plunge for the electric utility/ gas plant category. If electric utilities and gas plants are excluded, total construction starts for 2018 would be up 2 percent from 2017. The slight 0.3 percent increase for total construction starts at the national level in 2018 was the result of gains in four of the five major regions – the South Central, up 10 percent; the Midwest, up 4 percent; and the South Atlantic and the West, each up 1 percent. The Northeast experienced a 15 percent decline for total construction starts in 2018, following its 20 percent jump in 2017. Highway and bridge construction starts in 2018 increased 5 percent, maintaining the upward track after 2017's 14 percent advance. The top five states ranked by the dollar amount of highway and bridge construction starts, with their percent change from the previous year, were – Texas, up 24 percent; California, up 34 percent; Florida, up 13 per- cent; New York, up 5 percent; and Pennsylvania, up 5 percent. "The monthly pattern of construction starts was mixed during 2018, as elevated activity in June and October was offset by weaker activity in the months immediately following, with the end result being that the 2018 dollar amount of construction starts was slightly above the pre- vious year," stated Robert A. Murray, chief economist for Dodge Data & Analytics. "By recent standards, the overall level of construction starts in 2018 can be regarded as healthy, but the substantially slower rate of growth com- pared to the prior six years is suggestive of a market that's close to a peak." For 2018 as a whole, nonresidential building eased back 1 percent to $282.8 billion after its 11 percent increase in 2017. A major reason for the double-digit gain in 2017 was an 18 percent jump by the institutional building segment, which benefitted from a sharp 126 percent hike for trans- portation terminal starts. The 2018 amount for residential building was $323.5 billion, up 5 percent. Multifamily housing grew 8 percent, rebound- ing from the 8 percent decline that was reported for 2017. For the full year 2018, nonbuilding construction dropped 5 percent to $182.7 billion. Much of the decline came from the 31 percent slide for the electric utility/gas plant category in 2018, which reflected a decreased amount of large nat- ural-gas fired power plants reaching the construction start stage relative to 2017. The public works categories as a group held steady in 2018, following a 19 percent jump in 2017. The miscella- neous public works category, which fell 11 percent in 2018 after surging 43 percent in 2017, played a large role in shaping the recent yearly pattern for public works. Construction Starts Flat for Full-Year 2018

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