Rock Products

MAY 2019

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58 • ROCK products • May 2019 www.rockproducts.com ECONOMICS Single-family housing in February receded 2% from January, continu- ing the modest slippage that emerged during last year's fourth quarter. By geography, single family housing per- formed as follows in February relative to January – the West, down 5%; the South Central, down 2%; the South Atlantic, down 1%; the Midwest, unchanged; and the Northeast, up 7%. Nonresidential Building Nonresidential building in February was $244.5 billion (annual rate), basi- cally the same as January's volume. The commercial building categories as a group rose 2%, which followed a 4% gain in January. Warehouse con- struction surged 33% in February, led by a $200 million Amazon distribution facility in Oak Creek, Wis., an $85 mil- lion Costco distribution center in Katy, Texas, and a $70 million Goodyear Tire distribution center in Forney, Texas. Hotel construction climbed 22%, reflecting the start of the $372 million hotel portion of the $500 million Circa Resort and Casino in Las Vegas. Store construction improved 11%, helped by the start of the $64 million Macy's Men's Store redevelopment in San Francisco, and the commercial garage category grew 3%. Office construction was the one commercial project type to report a February decline, falling 21% after its 18% hike in January that featured such projects as the $550 million Reston Gateway office complex in Reston, Va., and the $350 million Hines office tower in Houston. Even with the decline, there were still noteworthy office projects that were entered as February starts, such as the $375 million Block 185 redevel- opment in Austin, Texas, and the $100 million Cannon House office renova- tion in Washington, D.C. There were also several large data center projects (included in the office category) that reached groundbreaking in February, led by a $175 million Google data center expansion in Moncks Corner, S.C., and two data centers in Ashburn, Va., valued at $120 million each. The institutional side of nonresidential building was unchanged in February after the 2% decline reported in Janu- ary. The healthcare facilities category had a strong February, increasing 26% with the lift coming from such proj- ects as the $265 million expansion to the Children's Hospital of Wisconsin in Wauwatosa, Wis., and the $176 million Colorado Center for Personalized Med- icine in Aurora, Colo. Educational facilities in February advanced 6%, led by the $200 million renovation of a healthcare research facility at the University of Pittsburgh in Pittsburgh, a $96 million engi- neering building at the University of Texas in Austin, Texas, plus large high school projects in Millersville, Pa., ($87 million), Hammond, Ind., ($78 million), Wentzville Mo., ($76 million), and Wimauma, Fla., ($76 million). On the negative side, the public build- ings category plunged 45% after its 59% jump in January that included the $525 million Utah State Prison relocation in Salt Lake City. Decreased construction starts were also reported in February for transportation terminal projects, down 35%; church construction, down 23%; and amusement-related work, down 7%. The manufacturing plant cat- egory dropped 14% in February after a 13% January gain, although the latest month did include the start of a $135 million lumber production facility in Albany, Ga., and a $105 million window manufacturing plant in Goodyear, Ariz. Year-to-Date During the first two months of 2019, total construction starts on an unadjusted basis were $99.3 billion, down 12% from the same period a year ago which had been lifted by the start of the $2.0 billion NEXUS natural gas pipeline in Ohio and Michigan and the $1.3 billion domed NFL stadium in Las Vegas. On a 12-month moving total basis, total construction starts for the 12 months ending February 2019 were able to remain essentially even with the corresponding amount for the 12 months ending February 2018. The 12% shortfall for total construction starts on an unadjusted basis during the first two months of 2019 compared to last year was the result of lower activity for each of the three main sectors. Residential building fell 15% year-to-date, with single family housing, down 13%; and multifamily housing, down 17%. Additional insight is provided by looking at 12-month moving totals, in this case the 12 months ending February 2019 versus the 12 months ending February 2018, which offers less volatility than is present with year-to-date comparisons of just two months. On this basis, total construction starts for the most recent 12 months essentially matched the amount of the previous period. By major sector, residential building grew 2%, with 2% gains for both single family and multifamily housing. Nonresidential building was unchanged from the previ- ous period, with manufacturing building, up 21%; commercial building, up 2%; and institutional building, down 5%. Nonbuilding construction dropped 4%, with public works, down 2%; and electric utilities/gas plants, down 16%. By geogra- phy, total construction starts showed this pattern for the most recent 12 months compared to the previous period – the South Central, up 9%; the West, up 3%; the Midwest and South Atlantic, each unchanged; and the Northeast, down 15%. Nonresidential building dropped 13% year-to-date, with commercial building, down 5%; institutional building, down 18%; and manufacturing building, down 29%. Nonbuilding construction retreated 6% year-to-date, as a 17% decline for public works was partially offset by a 116% surge for the electric utility/gas plant category after a very weak first two months of 2018.

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