Rock Products

MAR 2013

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Page 71 of 99

January Construction Retreats 12 Percent By Mark S. Kuhar The value of new construction starts dropped 12 percent in January to a sea��� sonally adjusted annual rate of $469.1 billion, according to McGraw���Hill Con��� struction, a division of The McGraw���Hill Companies. The decline followed a sharp 23 percent increase for total con��� struction in December, and brought the level of contracting back to the average pace that was reported during 2012. Much of January���s downturn was due to decreased activity for nonresidential building and housing, while the non��� building construction sector (public works and electric utilities) held close to its December volume. Highway and bridge construction climbed 14 percent. ���The pullback for construction starts in January was not surprising, given the up and���down pattern that was present for much of 2012,��� said Robert A. Murray, vice president of economic affairs for McGraw���Hill Construction. ���The large increase in December followed two months of lackluster activity in October and November, and it���s likely that De��� cember benefitted from the start of projects that were earlier put on hold given the uncertain economic and polit��� ical environment. Some of the uncer��� tainty was eased by the January 1 agreement between the Obama Admin��� istration and Congress, which averted the fiscal cliff for the time being, as well as by the move by Congress to push back the debt ceiling deadline to May. However, the automatic spending cuts as part of the sequestration process are scheduled to begin on March 1, and their implementation is likely to re��� strain the fragile economic expansion. The upward trend for housing is still ex��� pected to continue during 2013, along with modest improvement for commercial building, but this year���s 70 ROCKproducts ��� MARCH 2013 prospects for institutional building and public works remain in doubt.��� Nonresidential Building Nonresidential building in January fell 20 percent to $150.6 billion (annual rate), retreating after the 33 percent jump that was reported in December. On the institutional side, the educa��� tional building category in January dropped 9 percent, following a brief upturn in December. Healthcare facili��� ties in January plunged 35 percent, down from December, which had been boosted by several large hospital projects. Most of the smaller institutional cate��� gories showed weaker activity in Janu��� ary, including declines for transportation terminals, down 54 per��� cent; public buildings, down 39 per��� cent; and churches, down 35 percent. The one institutional category able to report a January gain was amusement��� related work, which rose 13 percent relative to December. On the commercial side, office construc��� tion in January retreated 27 percent from December. Store construction in January decreased 19 percent. There was a substantial increase for the hotel category. Warehouse construction also strengthened in January, rising 11 per��� cent. The manufacturing plant category in January dropped 39 percent from its heightened December amount. Residential Building Residential building, at $172.7 billion (annual rate), dropped 11 percent in January. Much of the decline reflected a steep 30 percent retreat for multifam��� ily housing, following elevated con��� tracting for this category in December. The January pace for multifamily hous��� ing was down 13 percent from its aver��� age monthly rate during 2012. Single family housing in January slipped 5 percent, pausing after the steady improvement that was shown over the course of 2012. The January pace for single���family housing was still up 11 percent from its average monthly rate during 2012, and up 33 percent on a raw (not seasonally ad��� justed) basis from the same month a year ago. By major region, single family housing showed this pattern for January rela��� tive to December ��� the West, up 4 per��� cent; the Northeast, down 2 percent; the South Central, down 7 percent; the Midwest, down 8 percent; and the South Atlantic, down 11 percent. indicated, ���Multifamily housing can be volatile on a month���to���month basis, and single���family housing is consider��� ably stronger than the same time a year ago. On balance, the housing re��� covery should be able to continue dur��� ing 2013, even with a lackluster performance by the overall economy.��� Monthly Construction Starts (Seasonally Adjusted Annual Rates, In Millions of Dollars) Jan. 2013 Dec. 2012 % Change Nonresidential Building $150,599 $187,669 -20 Residential Building $172,695 $195,013 -11 Nonbuilding Construction $145,802 $147,792 -1 Total Construction $469,096 $530,474 -12

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