The total construction gain was due to a rebound for nonbuilding construction (public works and electric utilities) following a lackluster October. November also featured a steady performance by housing and a slight decline for nonresidential building. During the first eleven months of 2002, total construction activity remained even with the same period a year ago.
"The construction industry in 2002 has essentially stabilized around last year's pace, although with a different mix by project type," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction Dodge. "Single family housing has been robust, and public works has experienced further growth. At the same time, institutional building has witnessed a slight loss of momentum, and commercial building continues to show sharply reduced contracting compared to a couple of years ago."
Nonresidential building in November slipped 2% to $143.1 billion. The commercial categories witnessed generally reduced contracting, with declines reported by stores, down 5%; hotels, down 11%; and warehouses, down 12%. The office category in November was up a slight 1%, although its status can still be viewed as depressed --through the first 11 months of 2002, the dollar amount of new office construction was down 30% from 2001. Manufacturing plant construction in November continued to be very weak, sliding an additional 12%.
The institutional side of the nonresidential market showed a mixed performance. Educational buildings, the largest nonresidential category, retreated 2% in November. Murray stated, "School construction continues to be very strong, but a modest slowdown appears to be taking hold as states deal with tougher fiscal conditions." Also showing declines in November were churches, down 2%; amusement-related projects, down 28%; and public buildings (courthouses and detention facilities), down 35%. On the plus side, healthcare facilities in November maintained the strength shown throughout much of 2002, rising 3%. Transportation terminals in November jumped 64%, boosted by the start of a $227 million airport terminal project in Boston and a $91 million airport terminal project in Harrisburg, PA.
During the first 11 months of 2002, the "no change" for total construction compared to 2001 reflected this behavior by major sector -- residential building, up 12%; nonbuilding construction, down 6%; and nonresidential building, down 11 %. The nonbuilding decline was the result of a 5% gain for public works being outweighed by a 44% drop for electric utilities. The nonresidential decline was due to a 22% plunge for commercial/industrial building being combined with a modest 1% retreat for institutional building. On a regional basis, total construction during the January-November period of2002 showed this pattern -- the South Atlantic, up 5%; the Northeast, up 5%; the West, up 2%; the Midwest, down 1 %; and the South Central, down 10%.