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July contracts increase 7 percent

McGraw-Hill Construction, a division of The McGraw-Hill Cos., New York, has reported construction starts increased 7 percent in July. For the first seven months of 2010, total construction was down 4 percent compared with the same period in 2009.

"The pace of contracting during the past year essentially has stabilized at a low level, and July showed activity moving back up toward the middle of its recent range following June's weak performance," says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "Nonresidential building seems to be leveling off after the substantial declines witnessed during the past year and, in a few cases, projects that were deferred now are reaching ground breaking. Still, given the negatives of tight bank lending, sluggish employment and the diminished fiscal position of states and localities, a sustained recovery for nonresidential building remains at least several quarters away.

"The public works sector continues to show generally healthy activity, supported by financing from ongoing federal programs, as well as stimulus funds," he continues. "The housing sector right now is in the midst of a pause from the earlier improvement shown during the latter half of 2009 through the first quarter of 2010. In effect, the volume of total construction starts appears to be in the process of ‘turning the corner’ after the steep decline reported in 2009, but the turn is assuming an extended U-shaped pattern."

Nonresidential building construction increased 3 percent in July. In the commercial category, office construction soared 130 percent; store construction fell 6 percent; manufacturing plants decreased 7 percent; warehouse construction declined 13 percent; and hotel construction dropped 38 percent. In the institutional category, health care facility construction climbed 3 percent; educational buildings held steady; public buildings decreased 6 percent; transportation terminals fell 19 percent; and amusement-related construction dropped 52 percent.

Residential building construction decreased 3 percent in July. Single-family housing decreased 2 percent, and multifamily construction fell 8 percent.

Nonbuilding construction jumped 25 percent in July.

During the first seven months of 2010, nonresidential building decreased 14 percent compared with the first seven months of 2009. Residential building was up 15 percent, and nonbuilding construction decreased 7 percent. By geographic region, the Northeast grew 8 percent; South Central decreased 1 percent; Midwest dropped 5 percent; South Atlantic decreased 6 percent; and West declined 13 percent.

8/22/2010  

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