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www.rockproducts.com ROCK products • August 2016 • 71 ECONOMICS New construction starts in June decreased 7 percent from the previous month to a seasonally adjusted annual rate of $595.1 billion, according to Dodge Data & Analytics. The nonbuild- ing construction sector (public works and electric utilities) fell sharply after being lifted in May by the start of a $3.8 billion oil pipeline in the upper Midwest and seven large power plant projects totaling $4.3 billion. Residential building in June edged down with reduced activity reported for both single-family and multifamily housing. At the same time, nonresidential build- ing registered moderate growth in June after sliding back in April and May. Highway and bridge work advanced 2 percent. Through the first six months of 2016, the top five states ranked by the dollar amount of highway and bridge construction starts were Texas, Califor- nia, North Carolina, Florida and Illinois. States ranked six through 10 during this period were New York, Pennsylvania, Ohio, Nevada and Virginia. "The construction start statistics on a monthly basis continue to show an up-and-down pattern," stated Robert A. Murray, chief economist for Dodge Data & Analytics. "This has often been due to the presence or absence of very large projects for a given month, which most recently applies to the May and June behavior for public works and electric utilities. "Over a broader time frame, the year-to- date comparisons during the first half of 2016 were skewed by a number of exceptionally large projects (defined as projects valued at $1 billion or more) that reached the construction start stage in last year's first half," Murray continued. "There were fewer such projects during the second half of 2015, which should help the year-to-date comparisons as 2016 proceeds. In addi- tion, last year's third quarter witnessed a broader slowdown for construction starts, as investment grew more cau- tious due to mounting concerns about the global economy and the continued drop in energy prices at that time. The generally weaker third quarter of 2015 will also help the year-to-date compar- isons for construction starts as 2016 proceeds. While investment remains cautious, some uncertainty has been alleviated with energy prices stabilizing during this year's first half. In addition, the anxiety created in late June by Great Britain's vote to leave the European Union has eased, as shown by the recent rebound in stock prices. There con- tinue to be several supportive factors worth noting for construction activity this year – long term interest rates have moved lower, commercial devel- opment is being financed by multiple sources, construction bond measures are providing funding for institutional building and public works projects, and the multiyear federal transportation bill is in place." Nonbuilding Construction Nonbuilding construction in June plum- meted 24 percent to $145.7 billion (annual rate), reversing the 24 percent jump that had been reported in May. The public works categories as a group fell 27 percent in June, pulled down by a 65 percent plunge for miscellaneous public works, which includes oil and natural gas pipelines. The miscellaneous public works cate- gory in May was lifted by the start of the $3.8 billion Dakota Access Pipe- line, which will connect the Bakken and Three Forks oil production areas in North Dakota to existing pipe- lines in Illinois. While miscellaneous public works did include several large projects as June starts, such as a $140 million rail extension project in Denver, they were not the same mag- nitude as the Dakota Access Pipeline project reported for May. Sewer construction and water supply systems also registered declines in June, falling 13 percent and 29 percent, respectively. River/harbor develop- ment posted a 13 percent gain in June, strengthening for the second month in a row after a weak April. New Construction Starts in June Drop 7 Percent Public Works Retreat; Nonresidential Building Shows Improvement; Highways Rise. By Mark S. Kuhar MONTHLY CONSTRUCTION STARTS (Seasonally Adjusted Annual Rates, In Millions of Dollars) June 2016 May 2015 % Change Nonresidential Building $180,828 $169,877 +6 Residential Building $268,581 $274,610 -2 Nonbuilding Construction $145,672 $192,914 -24 TOTAL Construction $595,081 $637,401 -7