The value of new construction starts in January retreated 2% to a seasonally adjusted annual rate of $572.4 billion, it was reported by McGraw-Hill Construction, a division of The McGraw-Hill Companies. The pattern of activity by major sector was mixed - residential building was down slightly while nonbuilding construction (public works and electric utilities) experienced a steeper decline. At the same time, nonresidential building rebounded after its lackluster volume in December.

"January showed some of the behavior that's expected to take place in 2005 - modest slippage for housing, and strengthening for nonresidential building," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "The path for public works in 2005 remains a tough call. State fiscal conditions are showing some signs of improvement, but more spending restraint could be coming from the federal government, and the next multiyear federal transportation bill still awaits passage."

Nonresidential building in January increased 5% to $148.1 billion (annual rate). Stronger contracting was shown by most of the commercial structure types, with stores up 11%, offices up 11%, and hotels, up 34%. The office category was helped by the start of a $71 million headquarters project in Providence RI. Warehouse construction was the only commercial category to retreat in January, falling 31%. Manufacturing plant construction rebounded from a very weak December, jumping 185% with support coming from the start of a $325 million semiconductor plant in Texas, a $75 million ethanol plant in Minnesota, and a $50 million automotive engine plant in Michigan.

The institutional nonresidential categories registered a mixed performance in January. Growth was reported for school construction, up 3%; public buildings (courthouses and detention facilities), up 6%, and amusement-related projects (arenas, theaters, convention centers), up 75% from an unusually weak December. On the negative side, January witnessed reduced contracting for health care facilities, down 17%; churches, down 20%; and transportation terminals, down 31%.

On an unadjusted basis, total construction in January 2005 was reported at $39.3 billion, up 1% from January 2004. By sector, residential building was up 6% year-over-year, while nonbuilding construction was up 12%. Nonresidential building trailed its January 2004 amount by 11%. The regional pattern for January 2005 total construction compared to January 2004 was the following: the South Central, up 14%; the South Atlantic, up 7%; the Northeast, up 3%; the West, down 2%; and the Midwest, down 15%.