Issue link: https://read.dmtmag.com/i/101356
58 ��� JANUARY 2013 ��� WORLD FENCE NEWS The value of new construction starts retreated 14% in October to a seasonally adjusted annual rate of $434.9 billion, according to McGrawHill Construction, a division of The McGraw-Hill Companies. Much of the decline was due to a sharp pullback by the electric power and gas plant category after a robust September. If this volatile project type is excluded from the month-to-month comparisons, total construction starts in October would register a 3% gain. Greater activity was reported in October for the public works sector, while both nonresidential building and housing settled back Through the first ten months of 2012, total construction starts on an unadjusted basis came in at $390.4 billion, a 4% gain relative to the same period a year ago. The October statistics brought the Dodge Index to 92 (2000=100), down from the 107 reported for September. Over the first 10 months of 2012, the Dodge Index has fluctuated within the range of 85 to 116, averaging 97 during this period. ���This year���s pattern for total construction has been shaped to some degree by the swings for the electric utility and gas plant category, which is still on track to achieve a new annual high in current dollar terms, even with its weak October performance,��� stated Robert A. Murray, vice-president of economic affairs for McGraw-Hill Construction. ���Leaving out electric utilities and gas plants, the amount of construction starts in 2012 would be up 3% through the first 10 months, which reflects a mixed pattern by project type. ���For housing, the emerging recovery for single family housing is joining the strengthening trend for multifamily housing that���s already underway,��� he said. ���For nonresidential building, commercial building is seeing modest The Dodge Report Drop in volatile electric and gas plant category drags October construction numbers down growth in 2012, but this has been offset by declines for institutional building and manufacturing plant construction. ���Public works year-to-date has been basically flat, beginning to stabilize after its 14% downturn in 2011. While the pattern of overall construction activity does seem to be moving towards more broad-based expansion, the persistent uncertainty affecting the U.S. economy continues to pose a downside risk,��� Murray noted. ���The degree to which policymakers in Washington, D.C. are able to agree on the steps necessary to avert the fiscal cliff will determine whether the nascent upturn for construction continues to grow in 2013 or slides back,��� he said. Massachusetts, contributing to a 93% decline for the category. In contrast, the public works sector in October climbed 19%. The miscellaneous public works category, which includes such diverse project types as site work, mass transit, and pipelines, soared 52% in October. The boost to miscellaneous public works came from $2 billion related to work on the Keystone Pipeline Gulf Coast Expansion, located in Oklahoma and Texas. Highway construction in October advanced 23%, aided by $900 million for work on the I-95 HOV/HOT lanes project in Virginia. The large increase marked a departure from what has been a declining trend in 2012 for highway construction, which on a ���For housing, the emerging recovery for single family housing is joining the strengthening trend for multifamily housing that���s already underway. For nonresidential building, commercial building saw modest growth in 2012, but this has been offset by declines for institutional building and manufacturing plant construction.��� ��� Robert A. Murray Nonbuilding construction in October dropped 32% to $133.4 billion (annual rate), retreating after the prior month���s 68% jump. September had been lifted by a 335% surge for the electric utility and gas plant category, as a $4.8 billion liquefied natural gas plant (the Sabine Pass Liquefaction Project) was included as a September start, along with six power plant and transmission line projects valued each in excess of $100 million. For October, the largest electric utility and gas plant project was $88 million for transmission line work in year-to-date basis was still down 11%. Bridge construction in October retreated 7%, although the month did include $94 million for bridge reconstruction work in Ohio. The environmental public works categories were led by a 41% increase for river/harbor development, which reflected the start of a $331 million explosives handling wharf in the state of Washington. Sewers and water supply systems dropped a respective 16% and 5% in October. Nonresidential building, at $131.6 billion (annual rate), decreased 4% in October. The manufacturing plant category plunged 73%, continuing to pull back from the improved activity that was reported earlier in 2012. Murray noted, ���As the result of the uncertainty created by the looming fiscal cliff, manufacturers have increasingly held back on investment as 2012 has progressed.��� Warehouse construction also weakened substantially in October, falling 33%. Office construction in October slipped 3%, although the month did include the start of several noteworthy projects: the $216 million Tower at PNC Plaza in Pittsburgh, Penn., the $110 million Energy Center III office tower in Houston, a $76 million municipal office building in Boston, and a $50 million corporate headquarters renovation for TJX in Marlborough, Mass. On the plus side, hotel construction in October grew 7%, helped by the start of a $189 million hotel in Austin, Tex. Store construction also registered a gain in October, rising 3% with the help of the $101 million retail portion of the $250 million City Point Residential Retail Development Project (Phase 2) in Brooklyn, N.Y. On the institutional side, the educational facilities category continued to lose momentum, dropping 3%. Even with the decline, several large education projects reached groundbreaking in October, including a $95 million facility for the University of Tennessee in Knoxville, as well as two large high school projects in Massachusetts. More considerable October declines were registered by amusementrelated work, down 22%; and transportation terminals, down 50%. The public buildings category posted a large October gain, climbing continued on page 60