New construction starts retreated 3% in December to a seasonally adjusted annual rate of $490.5 billion, it was reported by McGraw-Hill Construction Dodge, a division of The McGraw-Hill Companies. Both nonresidential and residential building were essentially steady, but nonbuilding construction (public works and electric utilities) fell sharply from the heightened contracting in November. For all of 2002, total construction advanced 1% to $498.7 billion. The modest gain in 2002 follows growth of 5% in 2001 and 6% in 2000.
"Total construction in 2002 essentially stabilized close to its 2001 level, as contracting continued to decelerate from the brisk pace of expansion several years ago," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction Dodge. "While the rate of growth has diminished, the overall level of construction has held up reasonably well against the backdrop of the 2001 recession and the economy's fragile recovery in 2002. The big plus over the past two years has been the robust performance by single family housing, which has offset the weakness shown by commercial building. Also maintaining a strong pace have been institutional building, namely schools, and public works. However, the greater fiscal stress now being experienced by the federal and state governments is likely to dampen institutional building and public works to some extent in 2003."