Rock Products

JUN 2013

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Page 47 of 67

April Construction Slips One Percent By Mark S. Kuhar New construction starts in April set‐ tled back 1 percent to a seasonally adjusted annual rate of $473.0 bil‐ lion, according to McGraw Hill Con‐ struction, a division of McGraw Hill Financial.The public works sector retreated from its elevated pace in March, and housing experienced a slight loss of momentum. Highway and bridge construction in April re‐ treated 25 percent. Meanwhile, nonresidential building in April showed some improvement after its lackluster performance dur‐ ing the previous two months. On an unadjusted basis, total construction starts in the January‐April period of 2013 came in at $141.1 billion, down 5 percent from the same pe‐ riod a year ago. The 2013 year‐to‐ date amount for total construction was pulled down by a sharply re‐ duced volume of new electric utility starts. If electric utilities are ex‐ cluded, total construction starts would be up 12 percent year‐to‐ date, with most of the lift coming from this year's stronger rate of homebuilding. "Total construction starts during the early months of 2013 have been able to stay close to last year's average pace, but the moderate upward trend that was present last year has yet to resume," stated Robert A. Murray, vice president of economic affairs for McGraw Hill Construction. 46 ROCKproducts • JUNE 2013 "The housing market for the most part has maintained its recent strength, even with a slight pause in April, but new electric utility starts have slowed significantly from last year's record volume. The boost that had been expected to come in 2013 from nonresidential building is at best only beginning to take hold, as the pickup in April fol‐ lowed weak activity in February and March. "One relative bright spot so far in 2013 has been a stronger‐than‐ex‐ pected amount of public works con‐ struction, although its April downturn may well be a sign of diminished ac‐ tivity to come, Murray said. Nonbuilding Construction Nonbuilding construction in April dropped 7 percent to $130.8 billion (annual rate). The moderate decline followed substantial volatility dur‐ ing the previous two months, with nonbuilding construction soaring 46 percent in March after plunging 33 percent in February. The public works portion of non‐ building construction decreased 15 percent in April after its heightened March activity, as declines were re‐ ported for most of the public works project types. Highway and bridge construction in April retreated 25 percent, following a 31 percent jump in March. April's rate of highway and bridge construc‐ tion was down 13 percent from the average pace reported for 2012 as a whole, despite the April start of a $128 million highway project in New Jersey and a $108 million high‐ way project in California. The environmental public works cat‐ egories weakened considerably in April, with river/harbor develop‐ ment, down 13 percent; sewer sys‐ tems, down 31 percent; and water supply systems, down 35 percent. Miscellaneous public works, which is comprised of such diverse project types as mass transit and pipelines, was the only public works category to register an April gain, rising 23 percent. Lifting the miscellaneous public works category in April were three large rail‐related projects – an $877 million segment of the RTD Eagle P3 Project in the Denver area, the $595 million BART South Bay Extension in San Jose, Calif., and the $300 million RTD I‐225 Light Rail Line in Aurora, Colo. Electric utility construction in April increased 52 percent from a very weak March, although the April level of activity was still low by recent standards – down 47 percent from this category's average monthly pace during 2012. Large electric utility projects that contributed to the April gain were a $740 million natural gas‐fired power plant in New Jersey, a $370 million wind farm in Kansas and a $270 million gas‐fired power plant in Colorado. The 5 percent decline for total con‐ struction starts on an unadjusted basis during the first four months of 2013 reflected a steep 33 percent drop for nonbuilding construction.

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