Rock Products

APR 2019

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52 • ROCK products • April 2019 The value of new construction starts in January advanced 2 percent compared to December, reaching a seasonally adjusted annual rate of $722.5 billion, according to Dodge Data & Analytics. The slight gain followed the loss of momentum that was reported towards the end of 2018, with total construction declines of 7 percent in November and 10 percent in December. Each of the three main construction sectors in January registered modest growth. •  Residential building climbed 4 percent, lifted by a rebound for mul- tifamily housing. •  Nonresidential building edged up 1 percent, reflecting a stronger pace for its commercial building segment including large office projects in Reston, Va., Houston, Boston, Austin, Texas, and Seattle. •  Nonbuilding construction also edged up 1 percent, helped by the start of a $1.0 billion natural gas pipeline in Oklahoma and several large electric utility projects. Highways and bridges were down 5 percent. "January's slight increase suggests that construction starts are beginning to stabilize after the diminished activ- ity reported at the end of last year," stated Robert A. Murray, chief econo- mist for Dodge Data & Analytics. "This is consistent with the belief that total construction starts for 2019 will be able to stay close to last year's volume. It's true that the rate of growth for total construction starts has subsided from the 7 percent annual gain reported back in 2017, but it's still too early to say that construction activity has made the tran- sition from deceleration to decline." Nonresidential Building Nonresidential building in January was $245.2 billion (annual rate), up 1 percent following a 13 percent slide in December. The commercial building categories as a group rose 4 percent in January. Office construction picked up the pace, climbing 18 percent, and fea- tured groundbreaking for these large projects – the $550 million Reston Gate- way office complex (Block A and Block B) in Reston, Va., the $350 million Hines office tower in Houston, the $225 mil- lion Amazon at Seaport Square office building in Boston, the $180 million Oracle office complex in Austin, Texas, and the $150 million Amazon Urban Treehouse office building in Seattle. Hotel construction in January rose 10 percent, helped by the start of the $245 million Westin Anaheim Resort Hotel in Anaheim, Calif., while the commercial garage category advanced 21 percent. Limiting the January increase for the commercial building group were declines for warehouses, down 13 percent; and store construction, down 24 percent. Despite its January decline, the ware- house category did include the start of several large projects, including a $95 million warehouse complex in Kenosha, Wis., and the $90 million Savannah Port Logistics Center in Pooler, Ga. Manu- facturing plant construction in January grew 9 percent, boosted by the start of a $125 million steel plate mill in Bay- town, Texas. The institutional side of nonresidential building slipped 2 percent in January. Educational facilities, the largest non- residential building category by dollar volume, retreated 10 percent after surging 26 percent in December. Cush- ioning the downturn for educational facilities was groundbreaking for sev- eral large projects, including the $124 million Comal Independent School Dis- trict High School #5 in New Braunfels, Texas, the $120 million Thayer School of Engineering at Dartmouth College in Hanover, NH, a $109 million high school in Gainesville, Va., and the $102 mil- lion Cape Cod Regional Technical High School in Harwich, Mass. The healthcare facilities category in Jan- uary dropped 11 percent, falling for the third month in a row, although the latest month did include the start of the $175 million University of Central Florida Lake Nora Teaching Hospital in Orlando and the $95 million Covenant Medical Center tower in Lubbock, Texas. Church construction, which experienced a 17 percent hike in December, fell back 34 percent in January. On the plus side for institutional build- ing, the public buildings category jumped 46 percent in January, lifted by the start of the $525 million Utah State Prison relocation in Salt Lake City. The transportation terminal category, which includes service facilities, climbed ECONOMICS MONTHLY CONSTRUCTION STARTS (Seasonally Adjusted Annual Rates, In Millions of Dollars) Jan. 2019 Dec. 2018 % Change Nonresidential Building $245,177 $242,521 +1 Residential Building $309,780 $299,046 +4 Nonbuilding Construction $167,545 $166,477 +1 TOTAL Construction $722,502 $708,044 +2 January Construction Starts Rise 2 Percent Modest Improvement Follows Two Months of Decline; Highways Slip. By Mark S. Kuhar

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