Issue link: https://read.dmtmag.com/i/365558
54 • SEPTEMBER 2014 • WORLD FENCE NEWS NEW YORK — New construc- tion starts in June advanced 6% to a seasonally adjusted annual rate of $549.7 billion, the highest level so far in 2014, according to McGraw Hill Construction, a division of McGraw Hill Financial. Nonresidential building strength- ened after pulling back in May, with the lift coming from the start of sev- eral large manufacturing plant proj- ects. Modest gains in June were also reported for housing and nonbuilding construction (public works and elec- tric utilities). During the first six months of The Dodge Report June construction starts show 6 percent rise 2014, total construction starts on an unadjusted basis were $254.1 billion, up 1% from the same period a year ago, the report noted. June's data raised the Dodge In- dex to 116 (2000 =100), up from 109 in May. During the first two months of 2014 the Index had averaged a slug- gish 104, but then the pace of con- struction starts began to pick up, as the Index averaged 112 over the next four months. "The first half of 2014 revealed a mixed performance by project type," stated Robert A. Murray, chief econ- omist for McGraw Hill Construction. "Single family housing stands out as the biggest surprise on the negative side, as its upward trend present for much of 2012 and 2013 has stalled for now. Public works and electric utili- ties are seeing generally decreased ac- tivity, as expected. "On the positive side, multifamily housing is still proceeding at a healthy clip, and commercial building contin- ues to move hesitantly upward, with office construction this year providing most of the support," he said. "Manu- facturing-related construction surged in the first half of 2014, boosted by the start of several massive chemical plants and refineries, while the insti- tutional building sector is still trying to make the transition from lengthy decline to modest growth. "The year-to-date increase for to- tal construction starts, at a slight 1%, reflects the lackluster activity present in January and February. More recent statistics suggest that the expansion for total construction is getting back on track in a moderate, if selective, manner," Murray said. Nonresidential building in June climbed 12% to $214.9 billion (an- nual rate), after slipping 4% in May. The increase came as the result of an exceptional volume of manufactur- ing projects in June, led by the start of a $3.0 billion polyethylene plant in Texas. Other large manufacturing projects that were reported as June starts included a $396 million nitro- gen plant expansion in Louisiana and a $375 million refinery expansion in Montana. If the volatile manufactur- ing category is excluded, nonresiden- tial building in June would be down 11% after a 22% gain in May. The commercial building sector in particular retreated in the latest month, sliding 27% after soaring 33% in May. Office construction dropped 49% in June following a robust May that included $2.3 billion for the office portion of the new Apple Inc. head- quarters in Cupertino, Calif. June still featured the start of several large office projects, such as a $146 million office tower in Chica- go and a $143 million office tower in Philadelphia. Hotel construction also pulled back in June, dropping 25% after a strong May, although the latest month did include $92 million for two con- vention center hotels in Boston. Stores and warehouses, which were sluggish during much of the first half of 2014, advanced 5% and 15% respectively in June. The largest store project entered as a June construction start was a $138 million shopping cen- ter in Redlands, Calif. The institutional side of the non- residential market improved 3% in June. The healthcare facilities catego- ry, which generally weakened in ear- ly 2014, increased 36% in June as the result of groundbreaking for a $900 million hospital campus in San Fran- cisco. The amusement category also posted a sharp June gain, soaring 62% with the support of a $375 million are- na in Las Vegas. In contrast, the educational build- ing category in June receded 10%, settling back from previous improve- ment. Even so, the latest month did include the start of several noteworthy public school construction projects, including a $104 million renovation of a high school in Washington, D.C., a $94 million high school in Severna Park, Md., and a $68 million middle school in Lynn, Mass. The other institutional categories witnessed decreased activity in June – churches, down 10%; transporta- tion terminals, down 38%; and public buildings, down 56%. During the first six months of 2014, nonresidential building in- creased 9% compared to a year ago. The manufacturing plant category soared 84%, reflecting groundbreak- ing for several very large chemical plants and refineries, such as what took place in June. 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