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October Construction Jumps 12% Nationwide

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Residential building, at $129.7 billion (annual rate), grew 2% in October. Multifamily housing continues to be one of the brighter categories for construction in 2011, as it climbed 5% in October. Large multifamily projects that reached groundbreaking in October included a $95-million apartment building in Boston and an $86-million townhome complex in Maryland. Through the first 10 months of 2011, the top five metropolitan areas in terms of the dollar volume of multifamily starts were: New York City, Washington, D.C., Boston, Dallas-Ft. Worth, and Chicago.

Single-family housing in October edged up 1% and has seen gradual upward movement after retreating during the first four months of the year. During the January-October period, the regional pattern for single-family housing showed this performance—the South Atlantic, no change; the South Central, down 3%; the West, down 4%; the Midwest, down 7%; and the Northeast, down 13%.

Nonbuilding Construction

Nonbuilding construction in October was reported at $160.2 billion (annual rate), the same amount as September. The electric utility category continued to see robust activity, rising 35% in October. Large electric utility projects that reached the construction start stage included $1.5 billion for work at Units 3 and 4 of the Vogtle nuclear power plant facility in Waynesboro, Ga., a $1.2-billion solar power plant in California, a $900-million solar power plant in Nevada, a $454-million hydroelectric facility in Kentucky, a $195-million wind farm in Kansas, and a $165-million wind farm in Illinois.

Murray said, “The electric-power category is on track this year to post a new current dollar high for construction starts, helped in particular by further gains for solar and wind projects. However, with the expiration of federal incentives for alternative-energy projects, next year is likely to see a slower pace for electric utility starts.”

The public works sector in October was mixed. The sewer and waste disposal category climbed 53%, helped by the start of a $380-million weapons destruction plant in Kentucky and a $331-million sewer tunnel in Washington, D.C. Water supply construction in October increased 8% while river/harbor development edged up 1%.

Moving in the opposite direction, highway and bridge construction in October pulled back 28% from a strong September, resuming the downward trend for these project types. The miscellaneous public works category, which includes mass transit and site work, dropped 11% in October, although it did include $302 million for work related to the Second Avenue Subway project in New York City.

The 3% shortfall for total construction on an unadjusted basis during the January-October period was due to weaker activity across the three major sectors. Nonresidential building fell 6% year-to-date, as a 15% decline for institutional building outweighed a 5% gain for commercial building and a 52% increase for manufacturing building.

Residential building was down 1% year-to-date, with single-family housing retreating 4% while multifamily housing grew 13%. Nonbuilding construction was also down 1% year-to-date, the result of a 17% slide for public works, combined with an 87% jump for electric utilities.

By geography, total construction starts during the first 10 months of 2011 relative to last year performed as follows—the West, up 8%; the South Atlantic, up 5%; the South Central, down 5%; the Northeast and Midwest, each down 12%.


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