Residential building, at $213.8 billion (annual rate), increased 3% in February, as 17% growth for multifamily housing outweighed a slight 1% drop for single family housing. The February gain for multifamily housing was led by three large projects in the New York City area, with two in Manhattan ($425 million and $322 million), and one in Brooklyn ($240 million).
Additional support came from the start of a $198-million apartment building in San Francisco. During the first two months of 2014, the metropolitan area with the largest dollar amount of new multifamily starts was New York City, followed by Washington, D.C., Miami, San Francisco and Denver. The slight 1% decline for single-family housing in February, compared to a steeper 4% drop in January, suggests that single-family housing may now be starting to stabilize after showing decreasing activity during the three previous months. In February, the single-family declines by region were shown by the Northeast, down 8%; the Midwest, down 2%; and the South Atlantic and West, each down 1%; while the South Central managed to edge up 1%.
“The most recent weakness for single-family housing can be attributed to tough weather conditions in parts of the U.S., and it’s expected that single family housing will regain its previous upward track very soon,” Murray said. “Still, the demand for single-family housing arising from potential first time homebuyers may be restrained going forward, due to such factors as continued tight bank lending standards for mortgages and the high student-loan debt faced by many in this group.”
Nonbuilding construction increased 8% in February to $130.9 billion (annual rate), making a partial rebound after the steep 33% decline in January. The public works sector overall improved 12%, due mostly to a 146% surge for the miscellaneous public works category, which includes such diverse project types as mass transit and pipelines.
Large mass-transit projects entered as February starts were the $1.3-billion Crenshaw/LAX Transit Corridor project in Los Angeles, plus two highway guideway projects in Honolulu valued at $444 million and $362 million respectively. A $345-million oil pipeline in Michigan was also entered as a February start. Water supply construction in February registered a moderate 6% gain, helped by the start of a $78-million water treatment plant in Lake Forest, Calif. The other public works categories fell back in February, with river/harbor development down 10%; bridge construction down 14%, highways down 21%, and sewers down 39%.
Electric utility construction in February dropped 25%, although the latest month did include the start of two large wind power projects located in New Mexico ($450 million) and Nebraska ($145 million).
The 3% decline for total construction starts on an unadjusted basis during the first two months of 2014, compared to 2013, was the result of a varied performance by major sector—nonresidential building, down 12%; residential building, up 5%; and nonbuilding construction, down 2%.
By geography, total construction for the January-February period of 2014 revealed this behavior compared to last year—the South Atlantic, down 8%; the South Central, down 7%; the Midwest, down 4%; the West, unchanged; and the Northeast, up 8%.
Useful perspective is also obtained by looking at 12-month moving totals, in this case the 12 months ending February 2014 versus the 12 months ending February 2013, which lessens the volatility inherent in comparisons of just two months. On this basis, total construction starts advanced 6%, as the result of the following performance by sector—nonresidential building, up 5%; residential building, up 20%; and nonbuilding construction, down 10%.
By geography, the 12 months ending February 2014 showed this pattern for total construction compared to the previous 12 months—the Northeast, up 14%; the West and Midwest, each up 9%; the South Central, up 3%; and the South Atlantic, down 5%.