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
Issue link: https://rock.epubxp.com/i/566624
46 • ROCK products • September 2015 www.rockproducts.com ECONOMICS A t a seasonally adjusted annual rate of $629.4 billion, new con- struction starts in July were essentially unchanged from June's pace, accord- ing to Dodge Data & Analytics. By major sector, nonresidential building showed slight improvement following its lackluster June performance, while residential building maintained the strengthening trend witnessed over the past several months. Highway and bridge construction retreated 19 percent in July. At the same time, nonbuilding con- struction in July continued to slide back from the exceptional activity wit- nessed earlier in the year that reflected the start of very large projects, includ- ing several massive liquefied natural gas terminals. Through the first seven months of 2015, total construction starts on an unadjusted basis were $397.0 billion, up 19 percent from the same period a year ago. Leaving out the volatile electric utility and gas plant category, total construction starts during the first seven months of 2015 would be up a more moderate 10 per- cent from the same period a year. "The first half of 2015 showed wide swings in the pattern of total construc- tion starts, affected by the presence or absence of unusually large projects," said Robert A. Murray, chief economist for Dodge Data & Analytics. "Amidst these top-line swings, the underlying trend of activity has been generally upward relative to last year. For non- residential building, support has come primarily from its institutional seg- ment, including educational facilities, transportation-related buildings, and amusement and recreational facilities. The commercial categories showed some deceleration during the early months of 2015, but positive real estate market fundamentals are expected to encourage renewed growth. Residen- tial building has benefitted from this year's heightened amount of multi- family starts, and even the single-fam- ily side of the market is showing some hesitant signs of strengthening." Nonresidential Building N o n r e s i d e n t i a l b u i l d i n g i n J u l y increased 2 percent to $194.0 billion (annual rate). The commercial catego- ries as a whole bounced back 12 per- cent in July, after retreating by the same percentage amount in June. Office construction climbed 7 percent in July, reflecting groundbreaking for several projects. These included the $232 million Bridgestone Americas office tower in Nashville, the $150 mil- lion Seaport Tower in Boston, a $100 million data center in Lowell, Mass., and a $100 million portion of the Toy- ota Corporate Campus in Plano, Texas. "During the first half of 2015, office construction appeared to level off after its substantial 35 percent gain in 2014," noted Murray. "On the positive side, office vacancy rates continued to recede through this year's second quarter, the volume of office construc- tion is still quite low by historical stan- dards, and the July pickup in construc- tion starts may well be an indication of renewed growth to come." Store construction in July improved 6 percent, helped by the start of the $40 million Wade Park Shopping Center in Frisco, Texas. Warehouse construction in July rebounded 28 percent after a weak June, and included groundbreak- ing for a $48 million Home Goods dis- tribution center in Tucson, Ariz. Hotel construction, which has been the one commercial property type to reg- ister healthy year-to-date percentage growth, slipped 4 percent in July. New manufacturing plant construc- tion starts were generally subdued in July, falling 39 percent from June, and substantially lower than the elevated amounts back in February and April New Construction Starts Show Ups and Downs in July Market Paced by Residential, Nonresidental Construction; Highway and Bridge Construction Down. By Mark S. Kuhar MONTHLY CONSTRUCTION STARTS (Seasonally Adjusted Annual Rates, In Millions of Dollars) July 2015 June 2015 % Change Nonresidential Building $194,046 $191,095 +2 Residential Building $288,462 $277,358 +4 Nonbuilding Construction $146,872 $161,023 -9 TOTAL Construction $629,380 $629,477 -0-