New construction starts settled back 2% in December to a seasonally adjusted annual rate of $532.6 billion, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. The housing sector remained steady at a high volume in December, but declines were reported for nonresidential building and public works. For 2003 as a whole, total construction advanced 3% to $518.6 billion. This follows 1% growth for total construction in 2002.
"The overall level of construction activity was quite healthy during 2003, thanks to the robust volume of single family housing," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "At the same time, it was a different picture for construction's other sectors. The tough fiscal climate in 2003 dampened institutional building, and caused public works to lose momentum after four straight years of expansion. Commercial building in 2003 weakened further, but on the plus side this sector showed it was turning the corner, as gains for stores and hotels partially offset declines for offices and warehouses. Moving into 2004, continued growth for total construction will require more broad-based improvement from commercial building, since it's expected that single family housing will ease back from its exceptional 2003 pace."