Reed Construction Data Reports Construction Starts End the Year on a Sour Note

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Reed's U.S. Chief Economist notes the wild ride of the 2013 economy continued through December.

Reed Construction Data
December construction starts, excluding residential contracts, plummeted 12.1% to $22.5 billion, after surging 15.3% in November.

Reed Construction Data announced today that the value of December construction starts, excluding residential contracts, plummeted 12.1% to $22.5 billion, after surging 15.3% in November. Starts were almost the same as in December 2012 (-0.2%). For the year, which totaled $273.7 billion, starts rose a modest 3.3% from 2012.

“Monthly commercial starts were on a wild ride in 2013, often varying dramatically from month to month,” stated Bernard Markstein, U.S. Chief Economist, Reed Construction Data. “December continued that pattern when commercial starts fell a sickening 33.7%, but that plunge followed a dizzying jump of 59.5% in November.”

For the year, commercial starts were up 26.8% from 2012. Although two of the largest sectors in the group, retail starts and private office starts, fell sharply for the month (down 20.0% and 22.8%, respectively), they were up 42.1% and 20.1%, respectively, for the year. Hotel and motel starts remained on the upswing, turning in a solid 29.2% gain for the month and increasing 60.5% for the year.

Industrial (manufacturing) building starts is another sector with wild monthly variations. In December, they rocketed up 246% after nose diving 66.2% in November. Starts for the year, however, were up a modest 1.1% from 2012.

Institutional building starts rose 7.4% in December, after falling 15.2% in November. For 2013, starts were down 11.2%. Starts for schools and colleges jumped 20.3% in December, but were down 9.0% for the year. Starts for hospitals and clinics advanced 16.5% in December, but were down 6.9% for the year.

Nonresidential building construction had a rough year in 2013. As of November, year-to-date construction spending was essentially unchanged from the same period in 2012 (down 0.1%) based on Census Bureau data. Nonresidential building starts did slightly better, increasing 2.7% for the year. With the expectation that the economy will grow faster this year, the outlook for nonresidential construction is for a better performance in 2014.

Heavy engineering (non-building) starts tumbled 17.4% in December, after surging 26.3% in November. For 2013, starts were up a passable 4.3% from 2012. Starts for all the categories in the group were up for the year except for miscellaneous civil construction, which were down 5.7%. Starts for the largest category in the group, road and highway construction starts, rose a paltry 1.0% for the year. The next largest category in the group, water and sewage construction starts, were up a slightly more respectable 4.7% in 2013.

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Markstein noted, "Despite limited government funding, heavy engineering projects have turned around recently. Because public-private partnerships are often the key to unlocking new projects, these partnerships are becoming the norm for state and local infrastructure projects.”

Since the starts data are not seasonally adjusted (NSA), caution should be used in analyzing monthly movements. Year-over-year comparisons are often used, as they remove much of the seasonal effects. 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.

About Reed Construction Data

Reed Construction Data is a trusted source for detailed, accurate, and up-to-date information on private and public construction projects across the United States and Canada. Reed’s data collection teams leverage strong industry relationships, innovative technology, and third-party data sources to deliver timely and accurate information on projects, companies, and contacts and daily updates for all types of general and civil construction. For more information, visit

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