November’s starts reinforce the industry’s overall positive news, with very strong numbers for commercial and mostly strong numbers for heavy engineering.
Norcross, GA (PRWEB) December 18, 2013
Reed Construction Data announced today that the value of November construction starts, excluding residential contracts, rose a solid 12.5% to $25.0 billion after a 5.0% increase in October. Compared to November 2012, starts were up a less spectacular 2.0%. The year-to-date starts data, which totaled $250.5 billion, were up a decent, if not overwhelming, 4.3% from the same period in 2012.
“November’s starts reinforce the industry’s overall positive news, with very strong numbers for commercial and mostly strong numbers for heavy engineering,” stated Bernard Markstein, U.S. Chief Economist, Reed Construction Data. “On the other hand, institutional starts, down for November, are down on a year-to-date basis and will be slow to turn around.”
Year-over-year comparisons are often used, as they remove much of the seasonal effects. Since starts data are not seasonally adjusted, caution should be used in analyzing monthly movements.
In November, commercial starts rocketed up 57.5%, after a more modest 2.6% increase in October. Year-to-date, commercial starts were 33.8% higher than in the same period last year. Retail starts, the largest category in the group, advanced 2.5% in November and were up a robust 48.8% year-to-date. Private office starts, the next largest category, surged 35.3% for the month and were up a respectable 12.9% on a year-to-date basis. Hotel and motel starts continue to perform well, jumping 16.1% in November. Year-to-date, they were up a stellar 75.2% compared to the same period in 2012.
Industrial (manufacturing) building starts continue to fluctuate wildly on a monthly basis. After more than doubling in October (up 178%), industrial starts plummeted 66.4% in November. That left them down 14.8% on a year-to-date basis from the same period in 2012.
Institutional building starts sank 11.6% in November after rising 7.7% in October. On a year-to-date basis, starts were down 10.5%. Construction activity for the institutional building group has performed poorly this year. January through October Census Bureau NSA construction spending numbers for the group were 6.0% lower than for the same period in 2012. The outlook for the group remains poor in the near term.
Heavy engineering (non-building) starts climbed 15.1% in November after falling 2.0% in October. November year-to-date starts were 3.9% higher than over the same period in 2012. Starts for all the categories in the group were up on a year-to-date basis, with the exception of miscellaneous civil construction starts, which were down 6.3%.
The largest category in the group, road and highway construction starts, has struggled due to lack of a longer-term program at the national level and lack of sufficient funds flowing into the highway trust fund. Starts were up a modest 1.1% on a year-to-date basis.
Heavy engineering projects have suffered due to reduced government funding, but are showing some improvement of late, as well as indications that more funding will be coming in the future. State and local governments are no longer willing to wait for federal government action. In many cases, new projects are the result of public-private partnerships. For the foreseeable future expect these partnerships to be a dominate force at the state and local levels.
View the complete report at http://www.reedconstructiondata.com.
The value of construction starts each month is summarized from the Reed database of all active construction projects in the U.S., excluding residential construction. Missing project values are estimated with RSMeans building cost models. A start is determined by taking the announced bid date and adding 30 days. It is then assumed the project will actually break ground within 30-60 days of the start date. Reed continues to follow the project via our network of researchers, so if the project is abandoned or rebid, the start data are subsequently updated to reflect the new information.
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Reed Construction Data, a division of Reed Business Information and the Inaugural Strategic Partner of the AIA, is a leading North American provider of construction information. Reed Construction Data’s diverse portfolio of innovative products and services includes national, regional and local project leads, accurate and up-to-date RSMeans cost data, marketing solutions and market intelligence to provide insight to construction industry professionals throughout the U.S. and Canada. Visit the Reed Construction Data website at http://www.reedconstructiondata.com.