Nonresidential construction activity continues at a high level but has not expanded since last fall, after adjusting for project cost inflation. However five markets continue to expand. The growth in construction spending from December to July is 30% for manufacturing, 27% for water — entirely new treatment plants, 22% for hotels, mostly destination hotels, 17% for power (electric and gas utilities plus energy industries), and 15% for public safety buildings.
The slowdown is evident in the construction starts totals from Reed Construction Data. The YTD (July) value of starts was down 6% compared to the first seven months of last year. July starts were relatively weak after strong totals in May and June. Only a few small markets have clearly expanded: government offices (100%), libraries and m museums (43%), dams and marine (22%), parking garages (21%) and airports (18%).
Among major markets the largest decline is for commercial buildings where reduced ROI prospects quickly caused project deferrals and cancellations. This slowdown is in response to the recession in the domestic economy and will quickly reverse when the recession ends by year end. Then renewed, if modest, expansion in the commercial sector will resume.
U.S. Non-building (Heavy Engineering) Construction
(billions of U.S. current dollars)
| Monthly Figures* (latest actual values) |
|||||||
| Actual | Forecast | ||||||
| Jun-08 | Jul-08 | 2005 | 2006 | 2007 | 2008 | 2009 | |
| Transportation (% change is period versus same period, previous year) |
35.760 | 37.021 | 24.959 | 27.912 | 32.274 | 35.735 | 38.175 |
| 14.0% | 11.2% | -0.2% | 11.8% | 15.6% | 10.7% | 6.8% | |
| Communication | 26.637 | 26.176 | 18.948 | 22.234 | 26.937 | 27.351 | 28.363 |
| -3.9% | -2.1% | 23.1% | 17.3% | 21.2% | 1.5% | 3.7% | |
| Power | 69.115 | 67.561 | 35.403 | 39.846 | 52.769 | 68.210 | 77.700 |
| 28.5% | 25.2% | -7.7% | 12.5% | 32.4% | 29.3% | 13.9% | |
| Highway | 76.141 | 76.114 | 63.956 | 71.789 | 75.309 | 77.746 | 82.650 |
| 2.9% | 7.8% | 8.7% | 12.2% | 4.9% | 3.2% | 6.3% | |
| Water and Sewer | 42.297 | 43.277 | 33.726 | 38.127 | 38.743 | 42.570 | 46.000 |
| 9.1% | 14.8% | 10.4% | 13.1% | 1.6% | 9.9% | 8.1% | |
| Conservation & Development | 5.339 | 5.507 | 4.457 | 5.101 | 5.219 | 5.164 | 5.455 |
| 5.5% | 5.4% | 10.4% | 14.4% | 2.3% | -1.0% | 5.6% | |
| Total | 255.289 | 255.656 | 181.448 | 205.008 | 231.251 | 256.775 | 278.343 |
| 10.6% | 12.4% | 5.4% | 13.0% | 12.8% | 11.0% | 8.4% | |
* Monthly figures are seasonally adjusted at annual rates (SAAR figures).
The total includes some miscellaneous buildings.
Actuals: U.S. Census Bureau, Department of Commerce (put-in-place investment figures).
Forecasts and table: Reed Research Group.
U.S. Nonresidential Construction
(billions of U.S. current dollars)
| Monthly Figures* (latest actual values) |
Annual Figures | ||||||
| Actual | Forecast | ||||||
| Jun-08 | Jul-08 | 2005 | 2006 | 2007 | 2008 | 2009 | |
| Lodging (% change is period versus same period, previous year) |
39.334 | 39.307 | 12.840 | 17.984 | 28.602 | 37.672 | 41.113 |
| 35.84% | 59.45% | 3.85% | 40.06% | 59.04% | 31.71% | 9.13% | |
| Office | 73.421 | 74.969 | 45.857 | 54.170 | 64.702 | 73.758 | 78.525 |
| 16.69% | 13.19% | 8.44% | 18.13% | 19.44% | 14.00% | 6.46% | |
| Commercial (mainly retail) | 87.546 | 87.741 | 70.248 | 76.673 | 88.478 | 89.084 | 89.850 |
| -1.91% | 16.16% | 4.90% | 9.15% | 15.40% | 0.68% | 0.86% | |
| Health Care | 45.321 | 45.371 | 34.413 | 38.489 | 42.904 | 45.503 | 48.850 |
| 9.39% | 10.19% | 7.04% | 11.84% | 11.47% | 6.06% | 7.35% | |
| Education | 103,479 | 105.277 | 79.575 | 85.081 | 96.085 | 104.266 | 111.050 |
| 5.38% | 16.79% | 7.42% | 6.92% | 12.93% | 8.51% | 6.51% | |
| Religious | 6.671 | 6.501 | 7.743 | 7.746 | 7.454 | 6.756 | 6.935 |
| -9.74% | -0.83% | -5.07% | 0.05% | -3.77% | -9.37% | 2.66% | |
| Public Safety | 12.263 | 12.650 | 7.284 | 7.800 | 9.869 | 12.693 | 13.473 |
| 23.77% | 32.72% | 4.02% | 7.09% | 26.52% | 28.61% | 6.15% | |
| Amusement/Recreation | 23.456 | 23.870 | 15.268 | 18.990 | 21.610 | 23.326 | 24.138 |
| 11.22% | 14.50% | -8.50% | 24.38% | 13.80% | 7.94% | 3.48% | |
| Manufacturing | 70.957 | 66.882 | 30.012 | 35.113 | 42.538 | 61.428 | 66.575 |
| 75.66% | 23.81% | 26.53% | 17.00% | 21.14% | 44.41% | 8.38% | |
| Total | 462.448 | 462.568 | 303.239 | 342.045 | 402.242 | 454.309 | 480.508 |
| 15.75% | 18.21% | 7.00% | 12.80% | 17.60% | 12.94% | 5.77% | |
* Monthly figures are seasonally adjusted at annual rates (SAAR figures).
The total includes some miscellaneous state and local government buildings.
Actuals: U.S. Census Bureau (Department of Commerce) (put-in-place investment figures).
Forecasts and table: Reed Construction Data.
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