With statistics in for November, it looks pretty certain that construction markets will come in well below 2008’s level. The dollar value of construction starts through the first eleven months of this year was $381 billion, which was 28% below the same period a year ago, according to McGraw-Hill Construction (MHC), of which ENR is part. The annual declines were broad based, including 34% declines for both residential and non-residential buildings and a 12% drop for non-building construction. The non-residential building market was sapped by year-to-year declines of 39% for office buildings, 44% for stores, 63% for warehouses and 66% for hotels, says MHC.
A weak November did not help. MHC data show the dollar value of construction starts fell 9% from the previous month, led by a monthly decline of 18% for non-residential building and 7% for non-building work. The November markets declined despite the start of some major projects, including a $747-million renovation of the United Nations Secretariat Building in New York City. Without that project, the office building market would have fallen 44% from its October amount, says MHC.
“Even with the November decline, the evidence of recent months suggests that overall construction activity has at least stabilized at a low level,” say Robert Murray, MHC’s chief economist. “Single- family housing is no longer exerting a downward pull, and the federal stimulus act to this point has supported greater construction on highways, bridges, river/harbor development and courthouses,” Murray says.