Single-family housing expected to ease back in the second half of the year

McGraw-Hill Construction recently released a report stating that new construction starts increased 1% in June to a seasonally adjusted annual rate of $565.1 billion. During the first six months of 2004, total construction was reported at $286.2 billion on an unadjusted basis, which is a 10% increase compared to the same period one year ago.

In the report, Robert Murray, vice president of economic affairs for McGraw-Hill Construction, weighed in on what to expect for the rest of the year. “June was helped by a stronger volume of public works construction, which so far in 2004 has been one of the weaker construction sectors,” Murray says. “While June’s upturn for public works was a welcome development, this sector going forward will still be tight fiscal conditions for the federal and state governments. During the first half of 2004, the construction industry continued to be supported by the robust performance of single-family housing in combination with stability for commercial building.”

Murray expects that the second half of 2004 will see single-family housing ease back a bit and commercial building remains the sector most likely to pick up the slack.