Rock Products

OCT 2014

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ROCK products • OCTOBER 2014 www.rockproducts.com 46 A t a seasonally adjusted annual rate of $540.6 billion, new construc‐ tion starts in August dropped 9 per‐ cent, according to McGraw Hill Construction, a division of McGraw Hill Financial. The decline followed July's elevated volume, the strongest so far in 2014, and brought activity back to the average pace reported during the first seven months of this year. Highways were up 7 percent, while bridges were up 9 percent. By major sector, nonresidential build‐ ing fell sharply, after being lifted in July by the start of several large man‐ ufacturing plant projects, while non‐ building construction (public works and electric utilities) also retreated. Residential building in August ran counter by posting a modest gain, helped by the continued growth for multifamily housing. "Nonresidential building over the past two months was boosted by the start of several unusually large energy‐re‐ lated manufacturing projects, so the pullback in August was not unex‐ pected. The commercial side of non‐ residential building continues to see moderate growth, and there's now further evidence that the institutional structure types have at least stabilized after a lengthy five‐year decline. While public works construction is now settling back, the August passage of the $10.8 billion patch to the High‐ way Trust Fund should help to keep the slide from getting too severe. Res‐ idential building continues to be sup‐ ported by the ongoing strength shown by multifamily housing. However, this year's pause for single family housing has emerged as an area of concern, limiting the growth that's being re‐ ported for total construction activity." Nonresidential Building Nonresidential building in August plunged 19 percent to $184.9 billion (annual rate), after the strong gains that raised activity for this sector 20 percent over the past two months. The manufacturing plant category in August dropped 81 percent from a July that had included the start of a $3.0 billion petrochemical plant and a $1.7 billion ethylene plant, both lo‐ cated in Texas, among other large manufacturing plant starts. August did include groundbreaking for a $500 million polyethylene plant expansion in Texas and a $130 million fabric manufacturing plant in Louisiana – substantial projects by themselves, but smaller in magnitude and number than the large projects entered as construction starts in July. If the manufacturing plant category is excluded, nonresidential building in August would have posted a 9 percent gain. The commercial building categories overall in August advanced 6 percent. Store construction led the way by jumping 27 percent, aided by the $157 million retail portion of the $957 million Nordstrom Tower, a massive residential/retail/hotel mixed use high‐rise that reached groundbreak‐ ing in New York. Warehouse construc‐ tion in August grew 8 percent, maintaining the improvement that's been shown after a weak first quarter. Office construction edged up 2 per‐ cent, helped by the August start of such projects as a $375 million office building in Milwaukee, a $175 million office tower in Bellevue, Wash., and a $117 million corporate headquarters in Portland, Ore. Hotel construction retreated 10 percent after a strong gain in July, although August did in‐ clude the start of such projects as a $200 million hotel in Washington, D.C., and the $82 million hotel portion August Construction Falls 9 Percent By Mark S. Kuhar Decline Follows July's Elevated Volume, However Highways Rose 7 percent, Bridges 9 Percent. Monthly Construction Starts (Seasonally Adjusted Annual Rates, In Millions of Dollars) August 2014 July 2014 % Change Nonresidential Building $184,872 $229,635 -19 Residential Building $235,589 $230,652 +2 Nonbuilding Construction $120,138 $135,979 -12 TOTAL Construction $540,599 $596,266 -9 ECONOMICS

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