Rock Products

JAN 2018

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54 • ROCK products • January 2018 At a seasonally adjusted annual rate of $650.5 billion, new construction starts in November dropped 12 percent from October, according to Dodge Data & Ana- lytics. Nonresidential building fell 14 percent in November, retreating for the second month in a row after the sharp improvement reported in late summer. The nonbuilding construction sector, which can be volatile on a month-to- month basis, plunged 32 percent in November after its 28 percent hike in October, which included the start of two large natural gas pipeline projects. Highway and bridge construction dropped 12 percent. Meanwhile, residential building man- aged to edge up 1 percent in November, as an improved amount for single-family housing slightly outweighed a moderate pullback for multifamily housing. "While total construction starts fell con- siderably during October and November, the declines came after an exceptionally strong September," stated Robert A. Murray, chief economist for Dodge Data & Analytics. "If one takes the average of September, October and November, total construction starts during that period would be down only 1 percent from the average of the previous eight months. On balance, the construction expansion has continued during 2017, although it's true that the rate of growth has slowed from the 6 percent gain reported for 2016 as well as the 11 percent to 13 per- cent yearly gains reported from 2012 through 2015. "Several features stand out about the pattern of construction starts during 2017," Murray continued. "For nonresi- dential building, the upward momentum has shifted from commercial building to institutional building, and the manu- facturing building category is no longer exerting a downward pull. For nonbuild- ing construction, public works has been lifted this year by an especially strong amount of pipeline starts, while high- way and bridge construction has been steady and environmental public works has weakened. A further retreat by elec- tric utilities and gas plants continues to depress the nonbuilding total." Nonresidential Building Nonresidential building in November was $220.1 billion (annual rate), a 14 percent drop on top of October's 31 percent decline, which followed gains of similar magnitude in September (up 34 percent) and August (up 10 percent). The institutional building segment in November descended 13 percent, with a steep 59 percent plunge for the amuse- ment category, which in October had received support from the start of the $1.1 billion retractable roof ballpark for the Texas Rangers in Arlington, Texas, and a $240 million convention center expansion in Lexington, Ky. By contrast, the largest amusement project entered as a November start was a $66 million recreational facility replacement in Madison, Wis. Weaker activity was also reported for public buildings (courthouses and detention facilities), down 51 percent; and trans- portation terminals, down 22 percent. On the plus side, educational facili- ties climbed 12 percent in November, aided by groundbreaking for a $421 million research laboratory at the University of California in Merced, Calif., a $237 million research facility at the University of California in San Francisco, and a $180 million cor- porate learning campus in Orlando. Healthcare facilities improved 4 per- cent in November, helped by the start of a $152 million hospital addition in Newark, Del., and the $150 million Oklahoma University medical center patient tower in Oklahoma City. Reli- gious buildings also strengthened in November, rising 5 percent. The commercial categories as a group dropped 9 percent in November. Ware- house construction fell 13 percent, despite the November start of two Amazon fulfillment centers, located in Salem, Ore., ($90 million) and the Baltimore area ($45 million). Hotel construction was down 10 percent in November, even with groundbreaking ECONOMICS MONTHLY CONSTRUCTION STARTS (Seasonally Adjusted Annual Rates, In Millions of Dollars) Nov. 2017 Oct. 2017 % Change Nonresidential Building $220,082 $255,279 -14 Residential Building $302,072 $297,932 +1 Nonbuilding Construction $128,385 $189,539 -32 TOTAL Construction $650,539 $742,750 -12 New Construction Starts in November Slide 12 Percent Nonbuilding Construction Dives; Highway and Bridge Construction Drops 12 Percent. By Mark S. Kuhar

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