Rock Products

DEC 2013

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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October Construction Advances 5 Percent Nonresidential Building Surged, Residential Building Resumed Its Upward Track. By Mark S. Kuhar The value of new construction starts increased 5 percent in October to a seasonally adjusted annual rate of $585.6 billion, according to McGraw Hill Construction, a division of Mc‐ Graw Hill Financial. The gain fol‐ lowed a 13 percent jump for total construction starts in September, and during both September and October much of the upward push came from groundbreaking for several very large projects. By sector, nonresidential building surged in October aided by the start of three massive manufacturing plants, and residential building re‐ sumed its upward track after a Sep‐ tember pause. Although nonbuilding construction in October settled back from its elevated September pace, the decline was cushioned by the start of structural work valued at $2.8 billion on the Tappan Zee Bridge replace‐ ment project in New York. "The levels of activity in September and October reflected the impact of several large and unusual projects, so a slower pace can be expected going forward in the near term," said Robert A. Murray, chief economist for McGraw Hill Construction. "At the same time, October's data did include positive signs that the underlying up‐ ward trend for construction is likely to continue, even amidst the greater uncertainty caused by the 16‐day government shutdown last month. For nonresidential building, more manufacturing‐related projects are reaching groundbreaking, the com‐ mercial structure types are moving upward albeit unevenly, and the edu‐ cational building category is provid‐ ing more evidence that it's stabilizing after a lengthy decline. Residential 46 ROCKproducts • DECEMBER 2013 building in October showed its re‐ silience with a modest gain after los‐ ing momentum in September. And, while public works is vulnerable to federal spending cutbacks, it contin‐ ues to benefit as major projects that have been in the planning pipeline are now reaching the construction start stage." Nonresidential Building Nonresidential building in October climbed 20 percent to $216.9 billion (annual rate). Manufacturing plant construction soared 147 percent, led by the start of these three projects – a $1.7 billion fertilizer plant in Iowa, a $1.7 billion natural gas processing plant in West Virginia, and a $1.5 bil‐ lion gasification plant in Louisiana that will produce industrial liquid and gas products from petroleum coke. New plant construction in Louisiana has been particularly strong through the first 10 months of 2013, up 265 percent compared to last year, with Louisiana ranked first among the 50 states in the dollar volume of manu‐ facturing starts. The commercial categories combined rose 3 percent in October, helped in particular by strong percentage growth for stores, up 29 percent; and warehouses, up 22 percent. The store category in October was supported by a $120 million expansion to an outlet mall at the Foxwoods casino complex in Ledyard, Conn., while warehouses benefitted from the start of a $50 million warehouse park in Edison, N.J. Offices and hotels retreated in Octo‐ ber, falling 8 percent and 15 percent, respectively. Despite its October de‐ cline, office construction did include the start of several noteworthy proj‐ ects, such as a $150 million office building in San Francisco, a $115 mil‐ lion office tower in Boston, and an $83 million corporate headquarters building in San Diego. On the institutional side, the educa‐ tional building category grew 4 per‐ cent in October, rising for the second month in a row and reaching its strongest volume so far in 2013. There were four large high school projects valued at $75 million or greater that reached groundbreaking in October, with two in Connecticut ($94 million and $75 million), one in Texas ($92 million), and one in Mary‐ land ($86 million). The healthcare facilities category in October dropped 20 percent after its sharp upturn in September, although October did include the start of sev‐ eral large hospital projects – a $550 million hospital in Chicago, a $230 million hospital in Reading, Pa., and a $130 million hospital in Bangor, Maine. Like educational buildings, the dollar amount for healthcare facilities was down 1 percent through the first 10 months of 2013 from the prior year. The smaller institutional categories in October showed a mixed pattern, with declines for churches, down 26 percent; and public buildings, down 19 percent; but gains for amusement and recreational facilities, up 12 per‐ cent; and transportation terminals, up 30 percent. The amusement category was helped

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