Rock Products

JUL 2019

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www.rockproducts.com ROCKproducts • July 2019 • 49 The value of new construction starts in April fell 15% to a seasonally adjusted annual rate of $685.2 billion, pulling back following the 16% hike that was reported in March, according to Dodge Data & Analytics. Steep declines were registered by two of the three main con- struction sectors. Highway and bridge construction in April edged up 1%. "The construction start statistics can be volatile on a month-to-month basis, and that's certainly been true in March and April, as a 16% jump was followed by a 15% decline," stated Robert A. Murray, chief economist for Dodge Data & Ana- lytics. "Much of the volatility can be attributed to the presence or absence of large projects – in March there were 10 projects valued each at $500 million or more that reached groundbreaking, while April saw only two such projects. Amidst this volatility, there are several trends about 2019 construction activity that are beginning to emerge. Overall construction activity continues to show deceleration around an up-and-down monthly pattern, with a varied perfor- mance by major construction sector. The public works side of nonbuilding construction got off to a slow start in 2019, which at least through March was partially offset by an upturn for electric utilities/gas plants. Some improvement for public works is expected as the cur- rent year proceeds, given the fiscal 2019 federal funding approved back in Feb- ruary as well as the continued support of state construction bond measures. Nonresidential building is staying close to its pace of last year, helped by contin- ued strength for office buildings, hotels, educational facilities, and transporta- tion terminals. The multifamily side of residential building is retreating, even with the occasional monthly upturn, while single-family housing has not yet provided evidence that it can rebound from the slower pace that took hold towards the end of last year." Nonbuilding Construction Nonbuilding construction in April plunged 31% to $147.2 billion (annual rate), which followed a 40% surge in March. The $4.3 billion LNG export ter- minal in Louisiana that was included as a March start caused much of this vol- atility – if this project is excluded, the decline for nonbuilding construction in April would have been a more moderate 9% following a 7% increase in March. The electric utility/gas plant category plummeted 87% in April, reflecting both weak activity for the month and the comparison to March that included the $4.3 billion LNG export terminal. The public works categories as a group dropped 5% in April, slowing after a 21% increase in March. The miscella- neous public works category (which includes site work, rail transit and pipelines) fell 29%, although April did include the start of a $307 million rail transit extension at Hartsfield-Jackson International Airport in Atlanta and a $290 million riverfront revitalization project in Omaha, Neb. Declines were also reported in April for water supply construction, down 17%; and river/harbor development, down 40%. On the plus side for public works, sewer construction in April climbed 88%, led by a $631 million water pol- lution control effluent tunnel in Carson, Calif., and a $412 million sewer project in Redwood City, Calif. Highway and bridge construction in April edged up 1%, rising for the second month in a row after declines in both January and February. Sup- porting April's improved highway and bridge amount was $253 million for the start of renovation work on the Throgs Neck Bridge in the Bronx, N.Y. The top five states for highway and bridge construction starts in April, ranked by dollar volume, were – California, Texas, Florida, New York and Ohio. Nonresidential Building Nonresidential building in April dropped 18% to $248.5 billion (annual rate), which followed a 24% increase in March. The manufacturing plant category fell 72% in April after soaring 90% in March, which included the $1.6 billion Toyota-Mazda automotive-man- ufacturing plant in Alabama. ECONOMICS MONTHLY CONSTRUCTION STARTS (Seasonally Adjusted Annual Rates, In Millions of Dollars) April 2019 March 2019 % Change Nonresidential Building $248.467 $303,385 -18 Residential Building $289,509 $293,714 -1 Nonbuilding Construction $147,178 $213,361 -31 TOTAL Construction $685,154 $810,460 -15 Construction Starts Fall Hard in April Steep Declines Registered by Two of the Three Main Construction Sectors. By Mark S. Kuhar

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