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June contracts decrease 3 percent

McGraw-Hill Construction, a division of The McGraw-Hill Cos., New York, has reported construction starts decreased 3 percent in June. For the first six months of 2010, total construction was down 4 percent compared with the same period in 2009.

"The pattern of construction starts still can be viewed as showing low-level stability, although barely, as June came in at the bottom of the recent range of activity," says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "The improvement shown by single-family housing during the past year has stalled, at least for the present.

"With regard to nonbuilding construction, the dollar amount of new electric utility projects has retreated, and it appears that the lift provided to transportation public works from the stimulus funding is leveling off," he continues. "For nonresidential building, the recent pickup in May and now June suggests that the worst of this sector’s decline may be over. However, renewed expansion for nonresidential building on a sustained basis is not likely in the near term given ongoing constraints such as tight bank lending, eroding state and local budgets, and sluggish employment growth."

Nonresidential building construction increased 9 percent in June. In the commercial category, hotel construction jumped 61 percent; manufacturing plants climbed 55 percent; office construction fell 4 percent; store construction decreased 19 percent; and warehouse construction dropped 26 percent. In the institutional category, amusement-related construction surged 85 percent; health care facility construction climbed 59 percent; transportation terminals fell 5 percent; educational buildings dropped 7 percent; and public buildings decreased 12 percent.

Residential building construction decreased 5 percent in June. Single-family housing decreased 1 percent, and multifamily construction fell 24 percent.

Nonbuilding construction dropped 13 percent in June.

During the first six months of 2010, nonresidential building decreased 15 percent compared with the first six months of 2009. Residential building was up 23 percent, and nonbuilding construction decreased 10 percent. By geographic region, the Northeast grew 5 percent; South Central increased 2 percent; South Atlantic decreased 6 percent; West declined 8 percent; and Midwest dropped 8 percent.

7/26/2010  

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