July construction jumps 6 percent
The value of new construction starts advanced 6 percent in July to a seasonally adjusted annual rate of $578 billion, it was reported by McGraw-Hill Construction, a division of The McGraw-Hill Cos., New York. Led by the start of two massive electric power plants plus healthy gains for several public works categories, the nonbuilding construction sector climbed sharply. In addition, residential building edged upward, reflecting some strengthening for multifamily projects that offset further weakness for single family housing.
For the first seven months of 2008, total construction on an unadjusted basis came in at $337 billion, down 14 percent from a year ago. Excluding residential building, new construction starts in the first seven months of 2008 were up 4 percent.
The July statistics lifted the Dodge Index to 122 (with 2000 being the base year at 100), compared to a revised 116 for June. “The current year has seen wide swings on a month-to-month basis for both nonresidential building and nonbuilding construction, and in July it was nonbuilding’s turn to surge ahead,” stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “While homebuilding continues to languish, and tighter lending standards are dampening commercial building, there are still project types that are reporting elevated activity to this point in 2008. For the nonbuilding sector, this includes electric power plants, water supply systems, and river/harbor development. For nonresidential building, such institutional structure types as schools, dormitories, hospitals, and detention facilities continue to see expansion.”
Residential building, at $182.5 billion (annual rate), grew 2 percent in July. Multifamily housing posted a 22 percent gain, boosted by groundbreaking for two large projects in New York, plus a condominium project in Koloa, Hawaii, and a million mixed use development in Dallas.