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November Construction Starts Slide 11% Nationwide

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Nonbuilding Construction

Nonbuilding construction, at $137 billion (annual rate) in November, dropped 14% from the previous month. The electric-utility category retreated 34% from its exceptional October amount, although the pace in November was still quite high by recent standards – 34% above the average monthly rate during 2010.  The noteworthy electric-utility projects in November were $1 billion for work on a nuclear facility in South Carolina, $1 billion for a solar farm in California, and $300 million for a wind farm in Iowa. For the public works categories, steep declines in November were reported for water supply systems, down 25%; and sewers, down 43%, while river/harbor development managed to rise 24% from a lackluster October.  Highway construction in November slipped 4%, although bridge construction climbed 29%, reflecting the start of a $587-million bridge project in the state of Washington. The miscellaneous public works category—which includes such diverse project types as sitework, mass transit, pipelines, and outdoor sports stadiums—grew 11% in November with the help of a $250-million upgrade to a football stadium in the state of Washington.

During the January-November period of 2011, nonbuilding construction was down 2% from the same period a year ago. For transportation-related public works, highways slipped 3% year-to-date while bridge construction fell 15%.  For the environmental public-works categories, declines were reported for river/harbor development, down 2%; sewer construction, down 7%; and water supply construction, down 17%.  The miscellaneous public works category plunged 47% year-to-date, due to a sharply reduced amount of new pipeline starts. On the plus side, electric-utility construction has soared during 2011, climbing 72% year-to-date, and already achieved a new annual high in current dollar terms.

Residential Building

Residential building in November advanced 4% to $138.2 billion (annual rate). Like recent months, multifamily housing provided the upward momentum, rising 25%. Large multifamily projects that reached groundbreaking in November included a $173-million apartment building in San Francisco and a $150-million apartment building in New York City, as the push continues to come from apartment projects (as opposed to condominiums). 
Single-family housing in November retreated 1%, settling back after the modest improvement of the previous month, as this category continues to struggle to achieve any upward traction.

During the first 11 months of 2011, residential building was reported to be steady with its dollar amount for the same period a year ago. Multifamily housing was up 17%, as the result of this year-to-date performance by geography—the West, up 33%; the South Atlantic, up 27%; the Northeast, up 19%; the South Central, up 10%; and the Midwest, down 1%.

The top five metropolitan areas in terms of the dollar amount of multifamily starts were: New York City, up 26%; Washington, D.C., up 56%; Boston, up 35%; Dallas-Ft. Worth, up 140%; and Chicago, up 20%.  The large percentage increase for multifamily housing in the West was helped by gains in such metropolitan areas as Seattle, up 139%; Los Angeles, up 61%; and San Francisco, up 41%. Single-family housing in the January-November period of 2011 was down 3%, as the result of this performance by geography—the South Atlantic, up 1%; the South Central, down 2%; the West, down 3%; the Midwest, down 6%; and the Northeast, down 12%.
The 2% decline for total construction starts at the national level during the first 11 months of 2011 was reflected in a mixed performance at the five-region level. Year-to-date declines for total construction were shown by three regions—the South Central, down 4%; the Northeast, down 11%; and the Midwest, down 12%.
Year-to-date gains were shown by two regions—the South Atlantic, up 5%; and the West, up 10%, with particularly large increases for new electric utility starts helping total construction for each region.


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