Rock Products

APR 2018

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Page 60 of 67 ROCK products • April 2018 • 59 ECONOMICS The value of new construction starts in January receded 2 percent to a sea- sonally adjusted annual rate of $725.9 billion, easing slightly after December's 13 percent hike, according to Dodge Data & Analytics. The nonbuilding con- struction sector, comprised of public works and electric utilities/gas plants, pulled back 18 percent after surging 45 percent in December, as that month was boosted by the start of the $2.3 billion I-66 Corridor Improvements Project in northern Virginia and a $992 million transmission line project in California. At the same time, nonresidential build- ing edged up 1 percent in January, supported by groundbreaking for the $1.3 billion domed stadium in Las Vegas that will be the new home for the NFL's Oakland Raiders once construction is completed prior to the 2020 season. In addition, residential building climbed 7 percent in January, helped by a rebound for multifamily housing after three straight months of declines. On an unadjusted basis, total construc- tion starts in January were $52.2 billion, down 7 percent from January 2017. On a 12-month moving total basis, total construction starts in the 12 months ending January 2018 were up 2 percent. By geography, total construction starts for January 2018 relative to January 2017 were the Northeast, down 36 percent; the West, down 10 percent; the South Central, down 9 percent; the South Atlantic, unchanged; and the Mid- west, up 42 percent. "Although the expansion for the construction industry lost some momentum during 2017, on a broad level it can be characterized as decel- eration as opposed to decline," stated Robert A. Murray, chief economist for Dodge Data & Analytics. "January's level of activity, which held close to last year's mid-range, is consistent with the picture of a decelerating expansion. The factors affecting construction activity going forward in 2018 have become more varied. Some dampening may come from higher material prices and tight labor markets, yet while inter- est rates are rising the increases are expected to stay moderate this year. The tax reform legislation is anticipated to lift economic growth in the near term, which may benefit commercial build- ing and manufacturing construction starts. The Trump Administration has provided the outline of an infrastruc- ture program, but the details need to be worked out by Congress against the backdrop of a growing federal budget deficit, which may limit any benefit this year for public works. One plus for 2018 is that the institutional side of nonresi- dential building should stay close to last year's elevated pace." Nonbuilding Construction Nonbuilding construction in Janu- ary was $153.8 billion (annual rate), down 18 percent from December's heightened amount. The public works categories as a group fell 15 percent, with a substantial 34 percent drop for highway and bridge construction which had soared 66 percent in December with the start of the $2.3 billion I-66 Corridor Improvements Project in northern Virginia. In January, the larg- est highway and bridge projects were a $230 million bridge in Tampa and a $105 million highway interchange upgrade in Virginia Beach, Va. Reduced activity was also reported in January for sewer construction and water supply construction, each with 26 percent declines. The miscellaneous public works category, which includes pipelines and mass transit projects, climbed 20 percent in January as the $2.0 billion NEXUS natural gas pipeline in Ohio and Michigan was entered as a construction start. The dollar amount of new pipeline proj- ects during 2017 shot up 90 percent to $22.3 billion, and while that amount may not be equaled in 2018, the NEXUS project shows that at least for the near term major pipeline projects continue to reach the construction start stage. River/harbor development work also strengthened in January, advancing 19 percent with the lift coming from $260 January Construction Starts Slip 2 Percent Public Works Weakens, Highway and Bridge Construction Plunges, Nonresidential Building Edges Up, Multifamily Housing Rebounds. By Mark S. Kuhar YEAR-TO-DATE CONSTRUCTION STARTS (Unadjusted Totals, in Millions of Dollars) Jan. 2018 Dec. 2017 % Change Nonresidential Building $240,831 $238,903 +1 Residential Building $331,312 $310,120 +7 Nonbuilding Construction $153,751 $188,217 -18 TOTAL Construction $725,894 $737,240 -2 Source: U.S. Dept. of Commerce

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