Construction Starts Fall in July
Mc-Graw Hill Construction reported August 21 that total construction starts fell in July, continuing a three-month slide that has all but returned the industry to 2011 levels.
Total construction starts fell 10 percent in July to a seasonally adjusted annual rate of $401.2 billion, according to industry analysts McGraw-Hill Construction.
Despite a strong showing in the spring, the pace of construction starts has declined since May, and the July numbers have receded to the lackluster levels seen at the beginning of the year. The volume of construction starts was averaging a four percent increase over 2011 for most of the year, at $262.9 billion unadjusted, according to an August 21 report.
''The construction industry is still struggling to gain upward traction, as construction starts continue to exhibit an up-and-down pattern,'' said Robert Murray, vice president of economic affairs for McGraw-Hill Construction. ''The upward potential for housing in the near term is also being dampened by the persistently hesitant U.S. economy. Overall, the construction industry remains stuck for now in an extended process of turning the corner.''
Nonbuilding construction, representing public works and electric utilities, fell sharply in July, while both nonresidential building and housing lost some of their earlier momentum. Nonbuilding construction in July dropped 18 percent to $109.1 billion (annual rate). Nonresidential building, at $138.1 billion (annual rate), decreased seven percent in July, with weaker activity reported for the majority of the institutional categories.
Residential building in July slipped six percent to $154.0 billion (annual rate). The decline was due to a 25 percent pullback for multifamily housing, following strengthening activity in May (up 32 percent) and June (up seven percent). Cushioning the multifamily decline in July were the start of apartment building projects in Boston, Jersey City, N.J., Los Angeles, as well as a senior living facility in Pleasanton, Calif.
The July pace for multifamily housing, while down six percent from the first six months of 2012, was still 10 percent above the average pace for this project type during 2011. Single family housing in July edged up one percent, not as strong as some of the gains shown earlier in 2012, but essentially maintaining the improved amount reported in May and June. The July pace for single-family housing was up six percent from the first six months of 2012, and up 27 percent from the average pace for this project type during 2011.