Rock Products

OCT 2011

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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August Construction Climbs 8 percent By Mark S. Kuhar At a seasonally adjusted annual rate of $424.7 billion, new construction starts in August advanced 8 percent, according to McGraw‐Hill Construc‐ tion, a division of The McGraw‐Hill Companies. The gain followed a 10 percent decline in July, and contin‐ ued the fluctuating pattern that's been present in recent months. The pickup for total construction in Au‐ gust was the result of greater activ‐ ity for each of construction's three main sectors – nonresidential build‐ ing, residential building, and non‐ building construction. Highways and bridges, however, plunged 21 percent in August. "During the first five months of this year, total construction had trended downward, but over the next three months an up‐and‐down pattern has emerged," said Robert A. Murray, vice president of economic affairs for McGraw‐Hill Con‐ struction. "This suggests that construction starts are begin‐ ning to stabilize after the ear‐ lier loss of momentum." Nonbuilding Nonbuilding construction in August climbed 13 percent to $143.0 billion, making a partial rebound after plunging 23 percent in July. The dams and river/harbor development category surged 283 percent, reflect‐ ing the boost coming from $1.5 bil‐ lion for work on the Olmsted Dam in Kentucky, as well as $260 million for the Calaveras Dam replacement proj‐ ect in California. Sewer and waste disposal construction was also 36 ROCKproducts • OCTOBER 2011 strong in August, advancing 64 per‐ cent, with support coming from the start of a $463 million chemical weapons storage and disposal facil‐ ity in Colorado. Regarding the drop for highways and bridges, Murray noted, "Of the various project types, highway and bridge construction re‐ ceived the most support from federal stimulus funds over the past two years, but that support has dimin‐ ished substantially during 2011." Nonresidential Nonresidential building in August grew 7 percent to $153.6 billion (an‐ nual rate). The institutional side of the nonresidential market showed a strong gain for healthcare facilities, which jumped 107 percent. The public building category climbed 55 percent in August from its low July amount. The amusement‐related category in August increased 18 percent. Heading downward in August was the educational building category, which fell 7 percent despite groundbreaking for a $95 million high school in Mary‐ land and an $86 million biomedical re‐ search facility in Minnesota. Also retreating in August were churches, down 11 percent; and transportation terminals, down 8 percent. The commercial side of the nonresi‐ dential market showed a mixed pat‐ tern by project type. Hotel construction surged 125 percent from a weak July. Warehouse con‐ struction grew 30 percent, while store construction advanced 18 per‐ cent. Moving in the opposite direc‐ tion was office construction, which fell 18 percent in August. A steeper decline was reported for the manu‐ facturing building category, which retreated 62 percent from July. Residential Residential building, at $128 billion (annual rate), increased 4 percent in August. Most of the upward move‐ ment came from multifamily hous‐ ing, which rose 15 percent in August, continuing the trend that has been present for much of 2011. Large multifamily projects in New York, Boston and Los Angeles reached groundbreaking in August. Through the first eight months of 2011, the top five metropolitan areas in terms of the dollar amount of multifamily projects were – New York, Washington D.C., Boston, Chicago and Los Angeles. Sin gle family housing in August man‐ aged to edge up 1 percent, as the pat‐ tern of recent months suggests that activity is stabilizing at a low volume after the declines witnessed earlier in 2011. The pace for single family hous‐ ing in August, in dollar terms, was still 2 percent below the average monthly pace that was shown during 2010. ✥ Year-To-Date Construction Starts (Unadjusted Totals, In Millions of Dollars) www.rockproducts.com

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