With new home construction up notably over the opening quarter of last year, recovery in the residential sector is outpacing the non-residential side — which fell 13% in the same period. Residential starts grew 6% in March, with single-family construction strongest in the Southern US — while a slump in non-building construction countered this gain. See the following article from HousingWire for more on this.
New construction starts in March were level from February, as an increases in both residential and commercial building were offset by a decrease in non-building construction, according to the latest McGraw Hill Construction monthly report.
New construction starts in March were at a seasonally adjusted annual rate of $435.6bn in March. Through the first three months of 2010, total construction on an unadjusted basis was reported at $91.9bn, up 2% compared to the same period one year ago. The residential sector is up 35% in the first three months of 2010 compared to the same time one year ago, but the nonresidential building sector dropped 13%.
“The pattern of total construction starts over the past year has made the transition from steady decline to at least low level stability, with the occasional hint of slight upward movement,” said Robert Murray, vice president of economic affairs for McGraw-Hill Construction.
In the residential building sector, the annual rate increased 6% to $146.5bn from February to March. Single-family housing increased 5%, marking the 11 out of 12 months of month-over-month gains. In dollar terms, the March pace for single-family housing is 61% below the monthly average recorded during the peak year of 2005, but is 31% higher than the monthly average in 2009.
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
Regionally, the single-family sector increased the greatest in the South Atlantic, where the sector rose 13% in March, followed by increases in the South Central (9%) and Midwest sectors (7%). The Northeast and West decreased 3% and 7%, respectively.
The chart above depicts construction starts in March and February of 2010 and compares year-to-date starts for the first three months of 2010 and 2009.
Multifamily housing in March increased 13%, the fourth month of improved numbers. The results were bolstered by a $161m condominium project that’s part of a $250m hotel development in New York, NY and a $110m mixed-use, transit-oriented development in New Brunswick NJ.
In the nonresidential building sector, the annual rate increased 6% to $155.1bn. The healthcare facilities category posted a 58% increase from February to March, “providing more evidence that it’s rebounding after the loss of momentum reported in 2009,” McGraw-Hill Construction said. The sector grew due to a number of new projects, including a $232m hospital tower in Durham NC, a $120m hospital in Hershey Pa., a $115m hospital in Monroeville Pa., and a $106m medical center in McKinney Texas.
Office construction rose 20% in March, boosted by the groundbreaking of the new headquarters for the US National Guard, a $369m project in Washington, DC.
The church and store categories increased 6% and 1%, respectively, while the manufacturing plant category increased 215%, due in large part to a $225m upgrade to a packaging plant in Georgia.
The $800m basketball arena in Brooklyn, NY that will be the new home of the NBA’s Nets basketball team and a $341m convention center in Nashville TN helped the amusement-related category surge 248%.
Sectors that declined included the transportation terminal category, which dropped 83% after the groundbreaking on a $1.1bn terminal construction project at the Los Angeles International Airport. The hotel sector was down 27% and the warehouse sector declined 6%. In addition, school construction was down 13% and public buildings decreased 12%.
The non-building construction sector, which includes the highway and bridge construction, mass transportation, river/harbor development, water supply and electric utilities sectors, declined 11% to an annual rate of $134bn in March, after increasing 19% in February.
This article has been republished from HousingWire. You can also view this article at HousingWire, a mortgage and real estate news site.
