NEW YORK — New construction starts in September grew 13 percent to a seasonally adjusted annual rate of $556 billion, according to McGraw Hill Construction.
Nonresidential building bounced back after losing momentum in August, and the non-building construction sector was lifted by the start of several large power plants, which ran counter to the sharp downward trend for electric utilities that’s been present during 2013. For the first nine months of 2013, total construction starts — on an unadjusted basis — were reported at $379.3 billion, up 2 percent from the same period a year ago. If electric utilities are excluded from the year-to-date statistics, total construction starts in the first nine months of 2013 would be up 11 percent.
The September data raised the Dodge Index to 118 (2,000 = 100), up from 104 in August and the highest reading for the index so far in 2013. From January through August this year, the index had hovered between 98-107.
“The overall level of construction activity will be affected by the presence of large projects in any one given month, and that was certainly the case in September,” said Robert A. Murray, vice president of economic affairs for McGraw Hill Construction. “While the extent of September’s gain overstates the current health of construction, the latest month did provide positive news for nonresidential building, which continued the up-and-down pattern that’s occurred during 2013. The September gain for nonresidential building reflected the manufacturing plant category posting a strong increase, commercial building staying close to its recently improved pace, and several institutional structure types rising from previously weak levels. After the downward trend that’s been underway from 2009 through the first half of 2013, the institutional building sector may now be starting to stabilize, which is necessary for total nonresidential building to register growth. At the same time, the recent congressional impasse over federal appropriations for fiscal 2014 and raising the debt ceiling only adds to the sense of uncertainty, which hampers renewed expansion for nonresidential building going forward.”
Publication date: 12/16/2013