Rock Products

AUG 2019

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www.rockproducts.com ROCK products • August 2019 • 75 Aggregates Industry Almanac Economic Update with a value of $152.7 billion, followed by mixed-used devel- opments and infrastructure projects with values of $67.9 billion and $67.1 billion respectively. GlobalData is tracking 894 projects in New York with a total value of $409 billion, of which 63% of the value are in the pre-execution and execution stages as of May 2019. Of the total number of projects tracked by GlobalData in Wash- ington, 89 are residential buildings, 72 are commercial and leisure and 83 are mixed-use developments. Some of these projects are related to Amazon, Microsoft or Google or the expansion thereof, meaning office buildings and apartment buildings to house their workers. Microsoft, for example, is currently undertaking the rede- velopment of its headquarters building in Washington. The project is costing $1 billion, and is set to start this year. Among the major contractors building large construction projects in Illinois are Jacobs, Arcadis and Ardmore Roderick, which were awarded the construction contract to complete the $4.7 billion Red and Purple Lines Modernization in Chi- cago while Thyssen-Krupp Industrial Solutions was selected to build the Tuscola Fertilizer Plant. Construction Spending The U.S. Census Bureau reported that construction spending during May 2019 was estimated at a seasonally adjusted annual rate of $1,293.9 billion, 0.8% (±1.2%) below the revised April estimate of $1,304.0 billion. The May figure is 2.3% (±1.5%) below the May 2018 estimate of $1,324.3 billion. During the first five months of this year, construction spend- ing amounted to $498.8 billion, 0.3% (±1.3%) below the $500.3 billion for the same period in 2018. In May, the estimated seasonally adjusted annual rate of public construction spending was $340.6 billion, 0.9% (±2.1%) below the revised April estimate of $343.7 billion. • Highway construction was at a seasonally adjusted annual rate of $111.6 billion, 3.2% (±6.1%) below the revised April estimate of $115.4 billion. •  Educational construction was at a seasonally adjusted annual rate of $79.3 billion, nearly the same as (±2.6%) the revised April estimate of $79.3 billion. •  Spending on private construction was at a seasonally adjusted annual rate of $953.2 billion, 0.7% (±0.7%) below the revised April estimate of $960.3 billion. •  Residential construction was at a seasonally adjusted annual rate of $498.9 billion in May, 0.6% (±1.3%) below the revised April estimate of $501.7 billion. • Nonresidential construction was at a seasonally adjusted annual rate of $454.3 billion in May, 0.9% (±0.7%) below the revised April estimate of $458.5 billion. "Private construction spending has been slipping for several months," said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. "Commercial construction spending decreased nearly 14% during the past year, which represents a stark reversal from previous trends when Amer- ica's consumer-spending-led expansion produced substantial demand for commercial construction. That said, commercial spending is up 102% compared to May 2010. Other private construction categories such as office and lodging have also been weak as rising construction and capital costs render pro formas more problematic. There are also growing concerns regarding overbuilding in certain segments/markets. "What was different about today's release was the decline in public construction spending," said Basu. "While the drop was reasonably small on a monthly basis, it stands in stark contrast to the preexisting trend. With the economic expan- sion entering its record 11th year, state and local government finances are generally in good shape, leaving more money to spend on infrastructure. Based on broad economic dynamics and fiscal considerations, there is little reason to believe that the dip in May portends a slowdown in infrastructure spend- ing during the months ahead." Housing Starts It takes 400 tons of aggregates to construct the average modern home, according to the National Stone, Sand and Gravel Association. Total housing starts posted a 0.9% decrease in May (1.269 million units) compared to an upwardly revised April esti- mate of 1.281 million units, according to the joint data release from the Census Bureau and HUD. Relative to May 2018, total starts are 4.7% below the annual pace of 1.332 million units. Single-family production in May posted a monthly decline, decreasing 6.4% to a seasonally adjusted annual rate of 820,000. Single-family starts in April were revised up to 876,000 units. The three-month moving average for sin- gle-family in May is 843,000 units. On a year-to-date basis, single-family starts are 5.1% lower as of May relative to the first five months of 2018. Single-fam- ily permits, a useful indicator of future construction activity, rose 3.7% in May (815,000 units) compared to April but have registered a 5.8% loss thus far in 2019 compared to last year. This is in line with the NAHB/Wells Fargo Housing Market Index, which held builder confidence in the market for new- ly-built single-family homes steady at 64 in June but remains lower on a year-over-year basis. Regional data show, on a year-to-date basis, positive condi- tions for single-family construction only in the South (+0.5 percent). Single-family construction is down 13.0% in the West, 11.9% in the Midwest, and 6.8% in the Northeast. Multifamily starts (2+ unit production) posted an increase of 10.9% in May to a 449,000 annual rate compared to April. After a slow start to the year, multifamily development is

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