"The construction industry continues to move at a healthy clip, supported by the strong amount of single family homebuilding," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "To a small degree, April witnessed the broad pattern that's expected to be present during 2004 - single family housing settling back from an exceptionally high volume, while nonresidential building registers modest improvement. The prospects for the public works sector are less certain during 2004, as the next federal transportation bill still awaits passage, but at least April showed modest strengthening after the weak activity during 2004's first three months."
Nonresidential building, at $149.1 billion, was up 2% in April. The commercial categories registered more pluses than minuses, led by gains of 10% for stores and 21% for warehouses. The April store total was boosted by an $85 million renovation of a shopping mall in San Jose, CA. Murray indicated, "Store construction showed renewed growth during 2003, rising 10% in dollar volume, and this structure type remains on track for yet another gain in 2004, as retailers and developers strive to stand out in the competitive retail landscape."
Office construction in April edged up 1%, supported by the start of a $65 million office project in Los Alamos, NM and a $54 million office renovation in Pittsburgh. On the negative side during April, garages/service stations were down 2% and hotels were down 4%. The manufacturing plant category in April slipped 13%, as this structure type remains at a depressed level.
The institutional side of the nonresidential market included a 6% gain for school construction and a 16% jump for health care facilities. Five large hospital projects reached the construction start stage in April, located in Aurora, CO ($310 million), Gilbert, AZ ($55 million), Durango, CO ($45 million), Seattle ($45 million), and Burlington, VT ($45 million). Transportation terminal work in April increased 8%, churches edged up 2%, while public buildings (courthouses and detention facilities) were flat. The social and recreational category in April plunged 33%, given its comparison to a very strong March that included the start of a major convention center expansion in Chicago.
Over the first four months of 2004, total construction on an unadjusted basis was up 9% compared to the same period a year ago. By sector, the year-to-date performance was as follows: residential building, up 20%; nonresidential building, down 3%; and nonbuilding construction, down 4%. The large gain for residential building is due to its comparison to a lackluster opening four months of 2003, and the year-to-date increase should lessen as the year proceeds.
By geography, total construction in the first four months of 2004 showed the following pattern - the South Atlantic, up 18%; the Midwest, up 9%; the South Central, up 6%; the West, up 5%; and the Northeast, up 3%.