Properties Magazine December 2012 : Page 20

October Construction Falls 14% Nationally he value of new construction starts retreated 14% in October to a seasonally adjusted annual rate of $434.9 billion, according to McGraw-Hill 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 hous-ing 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. T The October statistics brought the Dodge Index to 92 (2000=100), down from the 107 reported for September. Over the first ten 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 construc-tion 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,” says 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 ten months, which reflects a mixed pat-tern by project type. For housing, the emerging recovery for single-family hous-ing is joining the strengthening trend for multifamily housing that’s already underway. For nonresidential building, commercial building is seeing modest growth in 2012, but this has been offset by declines for institutional building and manufacturing plant construction. Public works year-to-date has been basi-cally flat, beginning to stabilize after its 14% downturn in 2011. While the pattern of overall construction activ-ity does seem to be moving towards more broad-based expansion, the per-sistent uncertainty affecting the U.S. economy continues to pose a downside risk. 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.” Nonbuilding construction Nonbuilding construction in October dropped 32% to $133.4 bil-lion (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 trans-mission line work in 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 $2.0 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 20 3URSHUWLHV | December 2012

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