July Construction Rises 6 Percent
New construction starts in July climbed 6% to a seasonally adjusted annual rate of $588.8 billion, according to McGraw Hill Construction, a division of McGraw Hill Financial.
The July statistics raised the Dodge Index to 125 (2000=100), up from a revised 118 for June, and marking the highest level for the Dodge Index so far in 2014.
Nonresidential building continued to advance, supported by yet another robust month for manufacturing plant projects as well as improvement for commercial building. The nonbuilding construction sector (public works and electric utilities) also advanced, helped by the start of a very large mass transit rail project. At the same time, residential building was unchanged from its pace in June. For the first seven months of 2014, total construction starts on an unadjusted basis were reported at $311.6 billion, a 4% gain compared to the same period a year ago.
"The construction expansion this year is getting more of a contribution from nonresidential building,” stated Robert A. Murray, chief economist and vice president for McGraw Hill Construction. “ The recent passage of a $10.8 billion ‘patch’ by Congress to shore up the Highway Trust Fund through May 2015 should also help to keep this year’s public works downturn from getting much more severe.”
Nonresidential building in July increased 7% to $229.0 billion (annual rate), showing further growth on top of the 12% increase reported in June.
The institutional building group as a whole dropped 14% in July, retreating after growing 12% during the previous two months.
Residential building, at $223.4 billion (annual rate) in July, held basically even with its June pace. Since the end of 2013, single family housing has been essentially flat, placing the strong upward movement that was reported during 2012 and most of 2013 on hold.
Nonbuilding construction in July climbed 14% to $136.4 billion (annual rate). While most of the public works categories showed decreased activity during July, miscellaneous public works (which includes site work, mass transit, and pipelines) soared 103%.
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