September construction drops 5 percent
New construction starts fell 5 percent in September to a seasonally adjusted annual rate of $529.9 billion, according to McGraw-Hill Construction, a division of The McGraw-Hill Cos., New York. Decreased activity was reported for both nonresidential building and nonbuilding construction, while residential building managed a slight gain from a low amount.
Through the first nine months of 2008, total construction on an unadjusted basis came in at $433.8 billion, down 14 percent from a year ago. If residential building is excluded, new construction starts during the January-September period of 2008 would be up 3 percent relative to this past year.
The September statistics lowered the Dodge Index to 112 compared to 118 for August. The index equaled 100 in the year 2000. “The September declines for nonresidential building and nonbuilding construction are consistent with the broad trends expected through the end of 2008 and into 2009,” said 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 in September fell 8 percent to $240.8 billion (annual rate). Residential building in September grew 2 percent to $160.1 billion (annual rate).