The Value of July New Construction Starts Jumps 8%

Aug 27, 2009 12:00 PM

The value of new construction starts rose 8% in July to a seasonally adjusted annual rate of $420.3 billion, according to McGraw-Hill Construction, New York. Non-residential building strengthened after a very weak June, while residential building continued to edge upward from its depressed performance at the outset of 2009. The non-building construction sector, comprised of public works and electric utilities, was essentially flat in July with the previous month.

“Since March, there’s been an up-and-down pattern for construction starts, supporting the belief that a leveling-off process is now underway,” states Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “This follows the steep decline during the latter half of 2008 that carried over into early 2009. Single-family housing, while still at an extremely low volume, has now shown improvement in five out of the past six months. Public works construction is beginning to reveal a faster pace for transportation-related projects, helped by the federal stimulus funding. For non-residential building, the broad downward trend is still in progress, but occasionally there are upticks, such as the strengthening that occurred in July following the dismal activity in June.”

Non-residential building in July climbed 13% to $170.5 billion (annual rate), putting on temporary hold the descent that brought contracting down 26% from the end of last year through June. Multifamily housing in July jumped 45%, but despite the large percentage gain contracting was still down 47% from last year’s monthly average. Non-building construction in July grew a slight 1% to $122.5 billion (annual rate).

On an unadjusted basis, total construction during the first seven months of 2009 was reported at $236 billion, down 35% from a year ago. By major sector, residential building fell 43% in the January-July period of 2009. In addition, non-residential building retreated 38%.

To read the full report, visit the McGraw-Hill Construction Web site.