Construction Contracting Eases 1% In August
Nonresidential building fell 3% to $145.8 billion. Several categories showed reduced activity, including warehouses, down 3%; stores, down 4%; schools, down 13%; theaters and convention centers, down 23%; hotels down 24%; and public buildings such as courthouses and detention centers, down 32%. According to Robert A. Murray, vice president of economic affairs for Dodge, “After reaching a peak in 1998, hotel construction fell 7% during 1999, due mostly to a pullback for limited service facilities. The greater weakness shown this summer may reflect heightened concern that the lodging sector has become overbuilt, and it now appears that hotel construction for the full year 2000 will see another moderate decline.”
All is not gloom and doom in the nonresidential building sector, however. Office buildings rebounded 15% from a slow July and the manufacturing plant category showed new life with a 21% advance with the help of a $128 million telecommunications equipment research lab in Pennsylvania. Transportation-related buildings jumped 28%, helped by the start of a $90 million bus maintenance facility in New York City ad a $68 million air freight distribution facility in northern Kentucky. Health care facilities also boosted a big gain in August, posting a 32% gain following July’s poor showing.
Nonbuilding construction, at $90.5 billion in August, was down categorically 5%. Electric power plant construction, on the other hand, posted a 15% gain, thanks to major power plant starts in Georgia ($370 million) and Illinois ($350 million). This continues power plant’s upward trend, which surged 166% in 1999, with 2000 looking as optimistic.
By region, construction activity was as follows: South Atlantic, up 4%; the Northeast, up 3%; the West, up 2%; the Midwest, down 4%; and the South Central, down 5%.