The remaining public works categories retreated in August from the previous month. River/harbor development slipped 5%, although August did include $148 million for sitework in advance of the upcoming Tappan Zee Bridge replacement in New York.

Water supply construction in August decreased 10%, while new sewer projects dropped 16%. Electric utility construction in August fell an additional 5%, continuing this year’s sharply lower amount of construction starts relative to 2012. The largest electric utility project in August was a $327 million wind farm in Texas.

Nonresidential Building

Nonresidential building in August dropped 8% to $148.9 billion (annual rate), falling back after a 9% gain in July.  Much of the downturn came from the institutional categories, which fell a combined 16%. Health care facilities pulled back 44% after showing improved activity in July, as construction is being restrained by several factors, including uncertainty related to the implementation of the Affordable Care Act and a greater number of hospital mergers. The largest hospital project that reached groundbreaking in August was a $118-million hospital in Shiloh, Ill., followed by a $66-million addition to a medical center in Plano, Texas.

Education-related construction in August dropped 5%, also after showing improved activity in July. There were several large high school construction projects that reached groundbreaking in August, including a $100-million high school in Haslet, Texas, and a $62-million high school in Guilford, Conn., but these were not enough to avert a decline for the overall category.  Most of the smaller institutional categories showed reduced contracting in August.

Transportation terminal work dropped 50% from its heightened July amount, although August did include $157 million for a passenger rail station reconstruction in Harrison, N.J.  The public buildings category in August retreated 35% while church construction stayed depressed with a 14% decline.

Amusement and recreational work ran counter to the generally downward movement for institutional building in August, climbing 57%.  Large projects that helped to lift the amusement total were the $126-million Harrah’s Resort Meeting Facility in Atlantic City, N.J., a $101-million addition to the Hard Rock Casino and Hotel in Sioux City, Iowa, and a $100-million renovation to the Inglewood Forum in Inglewood, Calif.

The commercial categories in August grew a combined 3%. Office construction increased 10%, lifted by the August start of several large projects—the $500-million Facebook data center in Altoona, Iowa, a $100-million addition and renovation to an office building in Rockville, Md., and a $91-million biomedical office building in New Haven, Conn. Hotel construction in August climbed 23%, rebounding from a weak July with the boost coming from groundbreaking for a $95-million hotel resort in Hollywood, Fla.

Warehouse construction in August advanced 3%, but store construction fell back 9%, despite the start of an $85-million regional shopping center in northern Virginia. The manufacturing plant category in August grew 21% after a weak July, helped by the start of a $138-million chemical plant in Louisiana and a $130-million ethanol plant in North Dakota.

The 1% gain for total construction starts on an unadjusted basis for the first eight months of 2013 was due to varied behavior by the three main construction sectors. Residential building climbed 27% year-to-date, with single-family housing up 30% and multifamily housing up 19%. 

Nonbuilding construction fell 21% year-to-date, as a steep 68% plunge for electric utilities outweighed a slight 2% increase for public works.  Nonresidential building was down a modest 3% year-to-date, as the result of this pattern by major segment—commercial building, up 10%; institutional building, down 9%; and manufacturing building, down 14%.

By geography, total construction starts in the January-August period of 2013 showed gains in four regions—the Northeast, up 9%; the West, up 6%; the South Central, up 4%; and the Midwest, up 2%. The South Atlantic was the one major region to report a year-to-date decline, falling 13%, as the comparison was against the first eight months of 2012, which included the start of two large nuclear-power facilities. If electric utilities are excluded from the year-to-date construction start statistics in the South Atlantic, then that region would register a 17% gain.