The January pace for multifamily housing was down 13% from its average monthly rate during 2012. Single-family housing in January slipped 5%, pausing after the steady improvement shown over the course of 2012. The January pace for single-family housing was still up 11% from its average monthly rate during 2012, and up 33% on a raw (not seasonally adjusted) basis from the same month a year ago. By major region, single-family housing showed this pattern for January relative to December – the West, up 4%; the Northeast, down 2%; the South Central, down 7%; the Midwest, down 8%; and the South Atlantic, down 11%.  
“Multifamily housing can be volatile on a month-to-month basis, and single-family housing is considerably stronger than the same time a year ago,” Murray says. “On balance, the housing recovery should be able to continue during 2013, even with a lackluster performance by the overall economy.”

Nonbuilding Construction

Nonbuilding construction in January receded 1% to $145.8 billion (annual rate). The electric utility category in January fell 45% after its sharp rebound in December. Although January did not receive the same boost from large projects that took place in December, there were several noteworthy electric utility projects included as January starts: a $1.2-billion upgrade to a coal-fired generating station in Kentucky, a $247-million power line project in Oklahoma, and a $230-million solar power facility in California. 

The public works portion of nonbuilding construction showed generally stronger activity in January. Highway and bridge construction climbed 14%, lifted in particular by a $1.4-billion tunnel project in Norfolk, Va., and the $235-million, upper-deck replacement of the Verrazano-Narrows Bridge in New York City.

“Highway and bridge construction during 2013 may be able to withstand much of the downward pull from fiscal restraint, since several very large projects are on track to reach groundbreaking this year,” Murray says. “In addition, the Highway Trust Fund still receives much of its support from gasoline tax revenues, as opposed to the general fund, which makes it less vulnerable to the automatic spending cuts scheduled to take place as part of the sequestration process.”

The miscellaneous public works category (which includes sitework, rail projects and pipelines), also had a strong January, rising 53% with the help of a $240-million railroad hub project in New Mexico.  Other January gains were shown by river/harbor development, up 17%; and sewers, up 10%, while water supply construction dropped 9%.

The 11% increase for total construction starts on an unadjusted basis, for January 2013 relative to January 2012, was due to this performance by major sector: nonresidential building, down 1%; residential building, up 27%; and nonbuilding construction, up 8%.

By region, total construction for January 2013 relative to January 2012 revealed increased activity in the South Atlantic, up 36%; the Northeast, up 30%; and the South Central, up 24%.  Decreased activity in January on a year-over-year basis was reported for the Midwest, down 4%; and the West, down 16%.

Additional perspective can be obtained by looking at 12-month moving totals, in this case the 12 months ending January 2013 versus the 12 months ending January 2012, which lessens the volatility present in one-month comparisons. For the 12 months ending January 2013, total construction starts were up 8%, due to this pattern by sector: nonresidential building, down 8%; residential building, up 30%; and nonbuilding construction, up 6%.

By region, the 12 months ending January 2013 showed the following behavior for total construction compared to the previous 12 months: the South Atlantic, up 22%; the South Central, up 12%, the Northeast and Midwest, each up 8%; and the West, down 7%.