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62 • SEPTEMBER 2013 • WORLD FENCE NEWS NEW YORK — New construction starts in June receded 1% to a seasonally adjusted annual rate of $489.5 billion, according to McGraw Hill Construction, a division of McGraw Hill Financial. Nonresidential building lost momentum in June after strengthening during the previous two months, and housing experienced a pause from its recent upward trend. Meanwhile, nonbuilding construction advanced in June, lifted by the start of several very large bridge projects. For the first six months of 2013, total construction starts on an unadjusted basis were reported at $233.8 billion, down 2% from the same period a year ago. The 2013 year-to-date decline for total construction was due primarily to a sharp reduction for electric utilities compared to a robust first half of 2012. If electric utilities are excluded, total construction starts for the first six months of 2013 would be up 9% from last year, led by substantial growth for housing. June's construction start statistics produced a reading of 104 for the Dodge Index (2000=100), compared to 105 for May. During the first four months of 2013, the Dodge Index averaged 99, slightly below its full year average for 2012 at 101, so May and June provided some evidence that the pace of construction starts is beginning to pick up. "The first half of 2013 revealed a mixed performance by project type, producing a hesitant pattern for total construction starts," stated Robert A. Murray, vice-president of economic affairs for McGraw Hill Construction. "On the plus side, the housing market continues to strengthen, and it should be able to register further gains this year even with the recent hike in mortgage rates. Commercial building continues to slowly advance, and public The Dodge Report Experts optimistic that housing market will continue rebound despite higher mortgate rates works construction to this point has not seen much dampening as the result of the sequester. "However, on the negative side, the retreat for institutional building has turned out to be steeper than expected, manufacturing plant construction has weakened, and new electric utility starts have plunged from last year's record pace," he said. "Assuming the downward pull from the negative sectors in this year's first half becomes less severe in the second half, then total construction starts for all of 2013 should still be able to register growth, but at just a single-digit pace in similarity to 2012." Nonresidential building in June slipped 2% to $151.3 billion (annual rate), retreating slightly after May's 9% gain. The institutional sector in June showed diminished activity for healthcare facilities, down 13%, as hospital mergers and the uncertainty related to the implementation of the Affordable Care Act continue to restrain construction. The largest healthcare projects reported as June starts were valued at $200 million or less, including a $200 million critical care tower in Akron, Ohio and a $114 million renovation to a university medical center in New York, N.Y. The public buildings category in June plummeted 33% from its briefly improved volume in May, returning to the weak amount witnessed earlier this year. The educational buildings cate- MONTHLY SUMMARY OF CONSTRUCTION STARTS Prepared by McGraw-Hill Construction Research & Analytics MONTHLY CONSTRUCTION STARTS Seasonally Adjusted Annual Rates, in Millions of Dollars June 2013 Nonresidential building Residential building Nonbuilding construction Total construction May 2013 $ 151,319 199,868 138,264 $ 489,451 $ 154,297 207,796 132,328 $ 494,421 Percent Change – – ___+ – 2 4 4 1 THE DODGE INDEX (Year 2000 = 100, Seasonally Adjusted) June 2013 ........................................................... 104 May 2013 ........................................................... 105 YEAR-TO-DATE CONSTRUCTION STARTS Unadjusted Totals, in Millions of Dollars 6 Mos. 2013 Nonresidential building Residential building Nonbuilding construction Total construction 6 Mos. 2012 $ 70,854 99,457 63,491 $ 233,802 $ 77,543 77,437 83,912 $ 238,892 Percent Change – 9 + 28 – 24 – 2 gory in June managed to strengthen 11%, suggesting that it's now leveling off after particularly weak activity in recent months. Large educational building projects that reached groundbreaking in June included a $252 million academic building for the New York City College of Technology in Brooklyn, N.Y., If electric utilities are excluded, total construction starts for the first six months of 2013 would be up 9% from last year, led by substantial growth for housing. an $81 million middle school in Pennsylvania, and an $80 million high school addition in Connecticut. Amusement-related construction increased 2% in June, while larger gains were reported for two of the smaller institutional categories from depressed activity in May – transportation terminals, up 24%; and churches, up 29%. The commercial sector in June showed varied behavior. Office construction jumped 44%, led by the June start of an $861 million computing center for the U.S. Army at Fort Meade, Md. Other large office projects that were reported as June starts were the $200 million Samsung American headquarters in San Jose, Calif. and a $110 million office complex in Richmond, Va. Hotel construction in June dropped 29% after an elevated May amount, with June's decline cushioned by the start of a $185 million hotel/casino renovation in Las Vegas. Both stores and warehouses slipped back in June, falling 6% and 7% respectively. The manufacturing plant category continued on page 65