Rock Products

JUN 2018

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www.rockproducts.com ROCK products • June 2018 • 65 ECONOMICS Nonresidential Building Nonresidential building was $243.3 billion (annual rate), down 1 percent from the previous month. The commer- cial categories as a group retreated 13 percent following a 17 percent increase in February, with declines reported for four of the five structure types. Hotel construction dropped 40 percent after being boosted in February by the start of three large projects, including the $250 million Loew's Kansas City Convention Hotel. In contrast, the larg- est hotel project entered as a March start was the $78 million Jimmy Buffett Margaritaville Hotel in Nashville. Office construction in March dropped 16 percent after being lifted in February by the start of such projects as a $600 million Google data center in Clarks- ville, Tenn., and the $220 million Cerner Corp. Campus in Kansas City, Mo. Still, March did include groundbreaking for several noteworthy office building proj- ects, led by a $600 million Google data center in Pryor, Okla., the $245 million U.S. Citizenship and Immigration Ser- vices building in Suitland-Silver Hill, Md., the $233 million office portion of the $300 million One Willoughby Square mixed-used development in Brooklyn, N.Y., and the $137 million BMO Bank office tower in Milwaukee. Store construction in March retreated 20 percent, while commercial garage construction slipped 7 percent. Ware- house construction was the one commercial structure type to report a March gain, rising 37 percent with the help of a $130 million Amazon fulfill- ment center in Rialto, Calif. The institutional categories as a group fell 11 percent. Healthcare facilities retreated 32 percent following a 50 per- cent hike in February, although March did include the start of the $344 million Indiana University Health Hospital and academic building in Bloomington, Ind., the $283 million Harrison Silverdale Hospital in Silverdale, Wash., and the $142 million Mercy Oklahoma Heart Hospital in Oklahoma City. Reduced activity in March was also reported for public buildings, down 12 percent; amusement-related buildings, down 29 percent; and religious build- ings, down 41 percent. On the plus side, educational facilities increased 8 percent, led by two medical research facilities – the $200 million Children's Mercy research tower in Kansas City, Mo., and the $109 million Health Sci- ences Education Center in Minneapolis. March also saw the start of several large high school projects, including a $90 million high school in Indian Land, S.C., and an $82 million high school expansion in Kirkland, Wash. Transpor- tation terminal construction grew 40 percent from a weak February, helped by the start of a $154 million station improvement project on the Long Island Railroad in New York. Offsetting the overall declines for com- mercial and institutional building in March was a 280 percent jump by the manufacturing building category, which benefitted from the start of a $1.0 bil- lion natural gas processing facility in Pierce, Colo., a $750 million chemical processing plant in Rosemount, Minn., a $500 million cryogenic natural gas pro- cessing plant in Slovan, Pa., and a $200 million cryogenic natural gas process- ing plant in Arkoma, Okla. Residential Building Residential building in March was $336.2 billion (annual rate), down 2 percent from the previous month. Multifamily housing slipped 7 percent following a 6 percent gain in February and a 36 percent hike in January. The number of large multifamily proj- ects entered as construction starts stayed high, with March seeing 13 mul- tifamily projects valued each at $100 million or more reach groundbreaking, slightly more than the 11 such projects entered as February starts. The largest multifamily projects entered as construction starts in March were the $398 million multifamily por- tion of the $450 million Seattle Times mixed-use development in Seattle, the $220 million multifamily portion of the $250 million Broadway Block mixed- use development in San Diego and the $217 million multifamily portion of a $258 million mixed-use development in Weehawken, N.J. Year-to-Date During the first three months of 2018, total construction starts on an unad- justed basis were $167.3 billion, down 7 percent from last year (which included exceptionally strong amounts for airport terminals and natural gas pipelines). On a 12-month moving total basis, total construction starts for the 12 months ending March 2018 were up 1 percent from the 12 months ending March 2017. The 7 percent decline for total con- struction starts on an unadjusted basis during this year's January-March period compared to the last year reflected decreased activity for two of the three main sectors. • Nonresidential building fell 17 per- cent year-to-date, with commercial building down 16 percent and insti- tutional building down 24 percent, while manufacturing building grew 39 percent. • Nonbuilding construction fell 15 per- cent year-to-date, with public works down 10 percent and electric utilities/ gas plants down 48 percent. • Residential building grew 7 per- cent year-to-date, with single family housing up 4 percent and multifamily housing up 12 percent. By geography, total construction starts for the first three months of 2018 versus last year showed this performance – the South Atlantic, down 1 percent; the South Central, down 5 percent; the West, down 9 percent; the Midwest, down 10 percent; and the Northeast, down 14 percent. Useful perspective comes from look- ing at 12-month moving totals, in this case the 12 months ending March 2018 versus the 12 months ending March 2017. On this basis, total construction starts were up 1 percent. By major sector, residential building advanced 3 percent, with single family housing up 7 percent while multifamily hous- ing retreated 6 percent. Nonresidential building slipped 1 percent, with insti- tutional building down 1 percent and commercial building down 6 percent, while manufacturing building climbed 32 percent. Nonbuilding construction was also down 1 percent, with public works up 2 percent and electric utilities/ gas plants down 16 percent.

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