Activity is Up 7 Percent in August
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.
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