Contracting
Activity is Up 7 Percent in
August
At a seasonally
adjusted annual rate of $509.4 billion,
the value of new construction starts in
August rebounded 7 percent from a
lackluster July, according to the Dodge
Division of McGraw-Hill Construction.
Double-digit gains were reported for
nonresidential building, while housing
showed more modest improvement. During
the first eight months of 2002, total
construction was up 1 percent compared to
the same period of 2001.
The latest monthís statistics lifted
the Dodge Index to 153 (1996=100), up
from a revised 143 for July. So far in
2002, the Dodge Index has fluctuated
around last yearís average of
149-four months this year have been above
149, and four months have been below that
mark.
Nonresidential building in August jumped
12 percent to $154.8 billion. The
institutional side of the nonresidential
market stayed strong, featuring a 16
percent gain for school construction that
included the start of a $100 million high
school in Illinois and an $80 million
university research building in North
Carolina. Transportation terminal work
also increased 16 percent in August,
while healthcare facilities climbed 20
percent. The social and recreational
category rose 23 percent, boosted by the
start of a $200 million visitors center
at the US Capitol in Washington DC, and a
$109 million sports arena in Memphis
Tennessee.
On the commercial side, offices and
warehouses showed some strengthening from
a weak July, increasing 5 percent and 20
percent respectively. Hotel construction
also picked up in August, rising 47
percent with the help of a $139 million
casino expansion in Las Vegas, Nevada.
However, store construction was down 5
percent in August, falling for the fourth
consecutive month.
Residential building in August grew 2
percent to $245.4 billion. Single-family
housing edged up 1 percent, while
multifamily housing increased 5 percent.
The demand for single-family housing
remains at a very high level, as low
mortgage rates continue to outweigh the
negatives of sluggish employment
conditions and diminished consumer
confidence.
During August, the 30-year fixed mortgage
rate averaged 6.3 percent, down from 6.5
percent in July, and September has seen a
further decline to 6.0 percent.
By geography, residential building in
August showed this pattern: the Northeast
and West, each up 4 percent; the Midwest
and South Atlantic, each up 1 percent;
and the South Central, down 2
percent.
During the first eight months of 2002,
the 1 percent increase for total
construction was due to this performance
by major sector: residential building, up
9 percent; nonbuilding construction, up 1
percent; and nonresidential building,
down 9 percent.
By major region, total construction in
the January-August period was the
following: the Northeast, up 7 percent;
the South Atlantic, up 6 percent; the
Midwest, up 1 percent; the West,
unchanged; and the South Central, down 9
percent.
Courtesy of EIFS
Alliance
