"The construction industry has picked up the pace in recent months," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction Dodge. "For most of 2003, single family housing has been the industry mainstay, and there are now signs of improvement being shown by other sectors after a weak start to the year. Moving into 2004, the continued improvement by such sectors as commercial building and transportation public works would help offset the modest retreat expected for single family housing."
Nonresidential building in November increased 1% to an annual rate of $149.2 billion. The commercial structure types were generally stronger, including a 98% surge for hotels that featured the start of a $155 million hotel/casino in Louisiana. Warehouses advanced 7%, while both offices and stores registered 3% gains. The November total for stores was helped by the start of a $153 million retail complex in San Francisco. Murray noted, "Hotels and stores constitute the leading edge of an improving trend for commercial building, with each structure type up 7% during the first eleven months of 2003 compared to last year." Despite November gains, offices, and warehouses continued to show declines in their 2003 year-to-date performance, with offices down 12% and warehouses down 17%.
The November nonresidential total was also helped by a 14% increase for school construction, boosted by the start of a $65 million science complex at the University of North Carolina plus the start of several large high schools in Virginia and Nevada. Transportation terminal work grew 61%, reflecting the start of a $150 million truck service facility in New York City. On the negative side, November declines were registered by health care facilities, down 2%; courthouses/detention facilities, down 3%; and amusement-related projects, down 39%. An especially large 70% decline was posted by the manufacturing plant category in November, given the comparison to an October that included the start of a $600 million conversion of a semiconductor plant.
The 3% increase for U.S. total construction during the January-November period of 2003 was due to this performance by major sector -- residential building, up 12%; nonresidential building, down 3%; and nonbuilding construction, down 10%. The regional variation for total construction during the first eleven months of 2003 was the following -- the West and South Central, each up 6%; the South Atlantic, up 4%; the Midwest, up 3%; and the Northeast, down 11%.