Residential Building

Residential building, at $206.8 billion (annual rate), advanced 3% in May.  Single-family housing, which had shown signs of leveling off in the previous two months, edged up 2% in May. The rate of activity for single-family housing continues to be high by recent standards, with May up 26% from the average monthly pace during 2012. By geography, single-family housing in May revealed gains in the Midwest, up 6%; the West, up 5%, and the South Atlantic, up 2%; but declines in the South Central, down 2%; and the Northeast, down 6%.

Multifamily housing in May grew 7%, and its May volume was up 24% from the average monthly pace during 2012. Large projects that supported the increase for multifamily housing in May included a $225-million condominium tower in Sunny Isles Beach, Fla., the $144-million apartment portion of a $250-million, mixed-use project in Rockville, Md.; a $90-million multifamily building in Cambridge, Mass.; and a $90-million multifamily building in San Francisco. During the first five months of 2013, the top five metropolitan areas in terms of the dollar amount of new multifamily starts were the following—New York City, Miami, Washington, D.C., Boston and Los Angeles.

Nonbuilding Construction

Nonbuilding construction in May increased 2% to $132.4 billion (annual rate). Supporting the nonbuilding gain was a 44% jump for electric utilities from a lackluster April, although the May amount for electric utilities was still down 24% from the average monthly pace during 2012.

The start of a $2.3-billion solar-power facility in California lifted electric utilities in May; the next largest electric utility projects were two $300-million, gas-fired power plants located in Delaware and Oregon. The public works categories in May showed varied behavior. Highway and bridge construction bounced back 11% after a 26% drop in April, continuing the up-and-down pattern that’s been present so far in 2013. Relative to last year, the stronger months for highway and bridge construction in 2013 have outweighed the weaker months, resulting in a 6% year-to-date gain.

A 32% jump was reported in April for water supply systems, helped by the start of a $537-million desalination plant in California, and river/harbor development climbed 81% from a weak April. On the negative side, sewer construction in May dropped 14%, sliding for the third month in a row. A steep 63% plunge was reported in May for miscellaneous public works, falling back after an elevated April that included the start of three large rail-related projects.

The 3% downturn for total construction starts on an unadjusted basis during the first five months of 2013 reflected a 29% pullback for nonbuilding construction. While the public works portion of nonbuilding construction was up 5% year-to-date, electric utilities were down 70%. The first five months of 2012 featured an exceptional amount of large electric utility projects to reach the construction start stage, led by two nuclear projects—$8.5 billion for Units 3 and 4 at the Vogtle nuclear power facility in Georgia and $8.5 billion for Units 2 and 3 at the V.C. Summer nuclear power facility in South Carolina.

Additional large electric utility projects that reached the construction start stage in the first five months of 2012 included a $1.3-billion, gas-fired power plant in Florida, a $1.1-billion, gas-fired power plant in Virginia, and a $1.1-billion solar-energy complex in California. So far in 2013, the largest electric utility projects to reach the construction start stage are the $2.3-billion solar power facility in California and a $1.2-billion upgrade to a coal-fired generating plant in Kentucky.

Residential building in the first five months of 2013 advanced 32% compared to last year, reflecting similar gains for single-family housing, up 32%; and multifamily housing, up 30%. Nonresidential building during this year’s first five months retreated 8%, due to a 13% drop for the institutional categories as well as a 20% decline for manufacturing plants. Commercial building on a year-to-date basis registered a 2% gain from last year.

By geography, total construction starts during the first five months of 2013 featured gains in three regions—the West, up 10%; the Northeast, up 7%; and the South Central, up 6%.  Year-to-date shortfalls were reported for two regions—the Midwest, down 7%; and the South Atlantic, down 22%. If electric utilities are excluded from the construction start statistics in the South Atlantic, that region would post a 23% year-to-date gain.