Contracting for new construction fell 3% in July to an annual rate of $434.4 billion, according to the F.W. Dodge Division of The McGraw-Hill Companies. Nonresidential building slipped following a strong June, while public works construction improved. “After a strong first quarter of 2000, construction activity began to settle back during the second quarter, and it now appears that the third quarter will see a continuation of this trend,” said Robert A. Murray, vice president of economic affairs for F.W. Dodge.

Nonresidential building dropped 8% in July to $150.6 billion. Posting declines were warehouses, down 14%; hotels, down 19%; office buildings, down 20%; health care facilities, down 25%; and amusement-related projects, down 34%. Stores and shopping centers remained even with June, as did school construction. Construction for churches gained 19% and transportation terminals surged 60%. “Even if commercial building slips back over the next few quarters, the impact on the nonresidential total should not be too severe, given the continued strength expected for such institutional categories as schools, churches, and airport terminals,” said Murray.

Nonbuilding construction advanced 8% in July, with electric power plant construction dropping 10%. The level of power plant construction in July was still high by recent standards, as it came in almost double the average monthly pace reported during 1999. “After being very weak for much of the 1990s, power plant construction took off in 1999, and it now appears that the current year will see further growth. About half the state have enacted deregulation plans, which has led to greater construction, and an added boost is now coming from developing capacity shortages across the nation,” said Murray.

During the first seven months of 2000, total construction on an unadjusted basis was 1% bellows its year ago amount. Nonresidential building was down 6% for the January-July period, while nonbuilding construction held steady with the prior year.

Geographically, the first seven months construction breakdown was as follows: South Atlantic, up 4%; the West, up 1%; the Northeast, unchanged; and South Central and the Midwest, both down 5%.