Residential Building

Residential building, at $168.9 billion (annual rate), climbed 9% in August. Multifamily housing bounced back 35% after pausing in July, matching its strong June pace. Large multifamily projects that reached groundbreaking in August included five that were valued at $100 million or more – a $150-million apartment building in Brooklyn, N.Y., a $132-million condominium complex in Key Biscayne, Fla., a $127-million residential tower in Boston, a $100-million apartment building in Long Island City, N.Y., and a $100-million apartment building in Washington, D.C.

Through the first eight months of 2012, the most active metropolitan areas in terms of the dollar volume of new multifamily starts were: New York City, Washington, D.C., Los Angeles, Miami and Boston. Single-family housing in August grew 3%, and has shown small yet steady gains during the first eight months of 2012, such that the amount in August was 22% higher than at the end of last year. The August gain for single-family housing included increases for four major regions – the Midwest, up 5%; the West, up 4%; the South Central, up 2%; and the South Atlantic, up 1%; while the Northeast settled back 2%.

Non-building Construction

Non-building construction in August increased 8% to $117.3 billion (annual rate). After the steep declines of the previous three months, electric utility construction in August surged 103%. Large electric utility projects reported as August starts were led by a $550-million solar power facility in Arizona, a $520-million solar power facility in California, and a $322-million gas-fired power plant in New Jersey.

The public works categories in August included gains for two project types – bridges, up 28%; and “other public works” (which includes pipelines, mass transit and site work), up 19%. The bridge category was boosted by a $433-million bridge for a light rail line in Santa Monica, Calif. The “other public works” category included $224 million for work on the Greencore CO2 pipeline in Wyoming. In contrast, weaker activity in August was reported for the remaining public works categories: sewer systems, down 2%; streets and highways, down 4%; water supply systems, down 10%; and river/harbor development, down 51%.

The 3% rise for total construction starts on an unadjusted basis during the first eight months of 2012 reflected greater activity for two of the three main construction groups. Residential building advanced 25%, with both its single family and multifamily segments increasing by that percentage amount. Non-building construction grew 3% year-to-date, as a 17% gain for electric utilities outweighed a 2% drop for public works.

Nonresidential building year-to-date ran counter to the other two main construction groups, sliding 13%. The nonresidential building decline was due to this pattern by segment – commercial building, down 2%; institutional building, down 17%; and manufacturing building, down 30%.

The year-to-date decline for nonresidential building has been getting smaller as 2012 has proceeded, although it still reflects the comparison to the same period a year ago, which included such projects as a $1.5-billion semiconductor plant in Arizona, the $1.2-billion redevelopment of the Delta Terminal at New York’s JFK International Airport, and the $1.1-billion National Security Agency data center in Utah.

By region, total construction starts during the first eight months of 2012 featured a large gain for the South Atlantic, up 37%, with much of the boost coming from the start of two massive nuclear power projects in Georgia and South Carolina.
Total construction starts in the Midwest were up 5% year-to-date, but declines were reported for the West and Northeast, each down 7%; and the South Central, down 8%.