"The pace of construction starts in November came in below this year's average, but 2004 overall is still turning out to be a very healthy year for the construction industry," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "The 9% increase for total construction during the first 11 months of 2004 compares favorably to the full year gains of 5% in 2003 and 1% in 2002. Single family housing has provided much of the support for total construction this year; an additional positive has been the emerging upward trend for commercial building."
Nonresidential building in November fell 6% to $149.0 billion (annual rate), as several structure types retreated from heightened levels in October. Store construction eased back 3%, while warehouses plunged 30%. Office construction dropped 25% from a very strong October that was boosted by the start of the One Bryant Park office complex in New York. If this huge project is excluded from the October statistics, then office construction in November would be up 3%. Manufacturing plant construction in November fell 17%, and declines were reported for these institutional structure types: churches, down 17%; amusement-related projects, down 26%; and public buildings (courthouses/detention facilities), down 32%.
On the plus side, November showed a 6% increase for school construction, the second monthly gain in a row, as this structure type appears to be stabilizing after a weaker performance earlier in the year. Hotel construction grew 10%, and health care facilities advanced 14% with the push coming from the start of large hospital projects in Sacramento ($149 million), Cincinnati ($95 million), Chicago ($81 million), and Indianapolis ($65 million). Transportation terminal projects in November were up 21%.
During 2004's January-November period, nonresidential building advanced 3% in dollar volume. The commercial categories showed across-the-board growth relative to 2003, including stores, up 5%; warehouses, up 6%; hotels, up 11%; and offices, up 17%. Manufacturing plant construction in the first 11 months of 2004 was up 4%. The year-to-date performance for the institutional structure types was mixed. Gains were posted by health care facilities, up 7%; amusement-related projects, up 6%; and public buildings, up 3%; while declines were reported for transportation terminals, down 2%; churches, down 3%; and most notably, school construction, down 7%.
The 9% increase for U.S. total construction during the first 11 months of 2004 was the result of this pattern by region: the South Atlantic, up 13%; the West, up 12%; the Northeast and South Central, each up 7%; and the Midwest, up 5%.