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70 • MARCH 2012 • WORLD FENCE NEWS The Dodge Report NEW YORK, N.Y. – New con- struction starts in December fell 3% to a seasonally adjusted annual rate of $410 billion, according to McGraw- Hill Construction, a division of The McGraw-Hill Companies. Nonresidential building in De- cember held steady with the prior month, and residential building was able to show modest improvement. However, the nonbuilding construction sector lost momentum in December, as electric utilities retreated from the record pace witnessed earlier in the year. New construction starts in December decline 3 percent; annual total slips 2 percent For all of 2011, total construction starts slipped 2% to $421.4 billion, fol- lowing the slight 1% gain reported for 2010. After the steep declines reported during the 2007-2009 period, when ac- tivity dropped a combined 38%, the overall volume of new construction starts has essentially stabilized at a low level during the past two years. 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"The pace of new construction starts continues to fluctuate within a set range, showing stability in a broad sense but not yet making the transition to renewed expansion," stated Robert A. Murray, vice-president of economic affairs for McGraw-Hill Construction. "Gains for a few project types are being offset by continued weakness for other project types, with the result that total construction is experiencing an extended bottom." During 2011, stronger activity was reported for multifamily housing, manufacturing plants, electric utilities, and even some commercial property types (hotels and warehouses), he said. These gains were countered by further declines for the publicly-financed parts of the construction industry, institu- tional building and public works, as well as by more weakness for single family housing. "For 2012, it's expected that there will also be a mixed pattern by project type. The pluses may be able to out- weigh the minuses, should the recent pickup in employment growth be ac- companied by greater real estate lend- ing by the banking industry, but this year will also see the constraint of di- minished federal and state funding support for construction programs," Murray said. Nonresidential building in De- cember, at $142.6 billion (annual rate), was essentially unchanged from No- vember. The institutional categories fea- tured a 9% gain for education-related construction, helped by the December start of a $140 million medical re- search facility in Houston and an $83 million high school in Washington, D.C. The depressed public buildings category showed a brief upturn in De- cember, climbing 118% due to groundbreaking for a $512 million de- tention facility complex in Stockton, Calif. Transportation terminal work in December jumped 98%, reflecting the start of a $125 million airport terminal renovation project at Dallas-Ft.Worth International Airport. Moving in the opposite direction for December were healthcare facilities, down 55%; and recreation-related projects, down 12%. Church construction in December was unchanged from the previous month. The commercial categories in December were led by a large gain for hotels, up 65%, with the lift coming from the start of a $70 million hotel in Chicago and a $45 million hotel reno- vation in Boston. Greater activity was also reported for warehouses, up 42%; and stores, up 4%; but office construction re- treated 26%. The manufacturing plant category in December did include the start of several large projects, such as a $388 million oil refinery in Washington State, but for the month this category was still down 3%. For 2011 as a whole, nonresiden- tial building dropped 4% to $154.8 bil- lion, the same as the 4% retreat for 2010 but less severe than the 30% plunge back in 2009. Most of the downward pull in 2011 came from the institutional sector, which fell 14%. The two largest institutional cate- gories, educational buildings and healthcare facilities, registered moder- ate declines of 12% and 9%, respec- tively. More substantial declines were posted by the smaller institutional cat- egories – public buildings, down 14%; churches, down 15%; recreation-re- lated projects, down 18%; and trans- portation terminals, down 29%. The commercial sector in 2011 registered a 6% gain in dollar terms, a noteworthy change following the de- clines of 12% in 2010 and 42% in 2009. The upward push for the com- mercial sector in 2011 came from ho- tels, up 51%; and warehouses, up 18%; with both showing improvement from extremely depressed activity in 2010. While stores and offices continued to lose momentum in 2011, with re- spective shortfalls of 1% and 6%, the declines were considerably more grad- ual than what occurred during the pre- vious three years. Manufacturing plant construction in 2011 surged 61%, reflecting both a broad-based upturn for this category as well as the boost coming from several massive projects, which included a $3 billion coal-to-gasoline plant and two large semiconductor plants. Residential building in December cour "Given the slight impr vement o se of 2011, o to see gr o housing might also be abr m th during 2012, although the le repor w will still remain quite weak compared to what was being ver the single famil vel of activity u le ted f pre vious decade c o - Rober t h . of the A. " Murra y y