Rock Products

NOV 2014

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ROCK products • NOVEMBER 2014 www.rockproducts.com 38 N ew construction starts in September advanced 10 percent to a seasonally adjusted annual rate of $604.1 billion, ac‐ cording to McGraw Hill Construction, a division of McGraw Hill Financial. The in‐ crease followed an up‐and‐down pattern during the previous two months, and brought activity to its highest level so far during 2014. Highways and bridges each climbed 8 percent in September. Nonresidential building registered a sharp gain, helped by an elevated pace for several institutional categories plus an‐ other brisk month for manufacturing plants, while the nonbuilding construc‐ tion sector (public works and electric utilities) also strengthened. Running counter in September was a decline for residential building. During the first nine months of 2014, total construction starts on an unadjusted basis were $419.5 bil‐ lion, a 5 percent gain compared to the same period last year. "While the progress for construction starts has been uneven at times on a month‐to‐month basis, the quarterly averages show that an upward trend has been re‐established," stated Robert A. Murray, chief economist for McGraw Hill Construction. "In this year's first quarter, construction starts fell back 10 percent, but then climbed 6 percent in the second quarter and another 6 per‐ cent in the third quarter. A key factor in keeping the construction expansion going in 2014 has been the greater role now being played by nonresidential building. Commercial building has con‐ tinued to see moderate growth from low levels, and the manufacturing building category is still showing a surge of chemical and energy‐related plants reach groundbreaking. What's different in 2014 is that the institu‐ tional structure types are now begin‐ ning to contribute to the nonresidential building upturn. In contrast, both pub‐ lic works and electric utilities have gen‐ erally lost momentum during 2014, notwithstanding their strong showing in September. And, residential building is now providing a much smaller lift than in the past two years, as the slug‐ gish performance by single‐family housing has outweighed further gains by multifamily housing." Nonresidential Building Nonresidential building in September in‐ creased 15 percent to $228.5 billion (an‐ nual rate), after pulling back in August. The institutional building group soared 33 percent, with substantial support coming from a 322 percent hike for the amusement and recreational category, which reflected the start of the $948 mil‐ lion Atlanta Falcons retractable‐roof sta‐ dium in Atlanta and $717 million for the casino portion of the $925 million Na‐ tional Harbor MGM Casino Resort in Oxon Hill, Md. Also climbing sharply in September was transportation terminal work, up 171 percent, led by the $240 million renovation of the 95th Street train and bus terminal in Chicago and a $144 million aircraft hangar in Wichita, Kan. Educational facilities, the largest non‐ residential building category by dollar volume, climbed 34 percent in Sep‐ tember. Large projects that helped to lift the educational total included a $150 million research lab in Cam‐ bridge, Mass., plus several sizeable high schools – two in Texas valued at $150 million and $100 million, respec‐ tively, and a $130 million high school in the state of Washington. The public buildings category (court‐ houses and detention facilities) in Sep‐ tember grew 11 percent, but religious buildings fell 30 percent. The healthcare facilities category in September plunged 44 percent, sliding back from a strong August, although the latest month did in‐ clude the start of a $206 million hospital expansion in San Antonio. The manufacturing plant category in September surged 105 percent, contin‐ uing to show the highly volatile month‐ to‐month behavior that's been present during 2014. Providing the upward push in September was the start of a $1.3 billion methanol plant in Louisiana and a $225 million tire manufacturing plant in Georgia. Construction Starts in September Climb 10 Percent By Mark S. Kuhar Highways And Bridges Each Climbed 8 Percent, While Nonbuilding Construction Jumped 38 Percent. Monthly Construction Starts (Seasonally Adjusted Annual Rates, In Millions of Dollars) Sept. 2014 Aug. 2014 % Change Nonresidential Building $228,496 $198,892 +15 Residential Building $212,716 $233,823 -9 Nonbuilding Construction $162,913 $117,836 +38 TOTAL Construction $604,125 $550,551 +10 ECONOMICS

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