At a seasonally adjusted annual rate of $535.6 billion, new construction starts in February increased 4% relative to the previous month, it was reported by McGraw-Hill Construction, a division of The McGraw-Hill Companies. Gains were registered by nonresidential building and housing, while the nonbuilding construction sector held steady with its January pace. During the first two months of 2004, total construction was 2% higher than the same period a year ago.
"The construction industry appears to be hovering at a level close to last year's pace," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "Housing remains very healthy, and the upturn for nonresidential building in February was a welcome development after a sluggish January. Over the course of 2004, it's expected that nonresidential building will see a modest strengthening trend. Admittedly, though, this year's sharp increase in steel prices has made the nonresidential upturn less certain, given the impact that higher costs and materials shortages may have on individual construction projects. At this juncture, it appears that the nonresidential upturn will be dampened but not derailed, assuming steel prices settle back by midyear, but the situation clearly bears watching."