September contracts decrease 5 percent
McGraw-Hill Construction, a division of The McGraw-Hill Cos., New York, has reported construction starts decreased 5 percent in September. In addition, during the first nine months of 2008, total construction was down 14 percent compared with a year ago.
"The September declines for nonresidential building and nonbuilding construction are consistent with the broad trends expected through the end of 2008 and into 2009," says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "The construction industry has been defined by the steep correction for homebuilding, and on a year-to-date basis nonresidential building and nonbuilding construction have held up reasonably well so far in 2008. However, the commercial structure types have shown a loss of momentum as 2008 has progressed. In addition, the turmoil in the financial markets is affecting not just commercial development, but it's also contributing to erosion in the fiscal position of states, which will dampen activity for the institutional and public works sectors going forward."
Nonresidential building construction decreased 8 percent in September. In the commercial category, manufacturing plants experienced a 56 percent drop; hotel construction fell 41 percent; and warehouses decreased 8 percent. Store construction was unchanged, and office construction grew 37 percent. In the institutional category, educational buildings increased 2 percent; health care facilities grew 2 percent; public buildings gained 2 percent; transportation terminals were up 9 percent; churches increased 20 percent; and amusement-related construction grew 48 percent.
Residential building construction increased 2 percent in September. Single-family housing declined 4 percent, and multifamily construction grew 25 percent.
Nonbuilding construction decreased 9 percent in September.
During the first nine months of 2008, nonresidential building increased 3 percent compared with the same time period in 2007. Residential building was down 38 percent, and nonbuilding construction increased 2 percent. By geographic region, the Northeast dropped 1 percent; South Central grew 2 percent; Midwest fell 9 percent; West declined 27 percent; and South Atlantic dropped 26 percent.
10/21/2008