Residential Building

Residential building, at $209.5 billion (annual rate), increased 3% in October. Single-family housing grew 2%, rebounding after slipping 2% in September. The dollar amount for single-family housing in October was up 12% from the start of the year, as this category returned to the gradual yet steady upward trend that’s been present for most of 2013.

By geography, single-family housing in October was led by gains in the Northeast (up 8%) and the West (up 5%), while activity was basically flat in the South Atlantic and the South Central, and activity in the Midwest was down 2%.

Multifamily housing in October climbed 6%, making a partial rebound after sliding 14% in September. Large multifamily projects that contributed to the October gain were a $268-million condominium hotel in Honolulu, a $162-million apartment building in Boston and an $84-million apartment building in Mineola, N.Y. During the first 10 months of 2013, the leading metropolitan areas for multifamily construction starts (ranked by dollar volume) were the following—New York, Boston, Washington, D.C., Miami  and Los Angeles.

Nonbuilding Construction

Nonbuilding construction dropped 6% in October to $159.2 billion (annual rate). The decline was the result of a sharp downturn for electric utility construction, which fell 75% in October after experiencing a brief spike in activity during September. There were two large electric utility projects that reached the start stage in October, a $750-million natural gas-fired power plant in Texas and a $200-million wind farm in Michigan, but these were smaller in scale than the large utility projects entered as September starts. 

The public works categories combined were up 28% in October, due primarily to a 326% surge for bridge construction that reflected $2.8 billion for the start of structural work on the Tappan Zee Bridge replacement project across the Hudson River in the Tarrytown, N.Y. area. Earlier, site work totaling $300 million for this project had been reported, bringing the estimated construction start cost for the entire project to $3.1 billion. 

October gains were also reported for sewer construction, up 45% with the help of a $263-million wastewater treatment plant in Maryland, and highway construction, up 8%. Moving in the opposite direction, miscellaneous public works fell 4% in October, although it did include the $440-million Northgate Line

Extension vehicle tunnel in Seattle. Steeper declines in October were reported for water supply systems, down 20%; and river/harbor development, down 50%.

The 4% gain for total construction starts on an unadjusted basis during the first 10 months of 2013 was due to varied behavior by the three main construction sectors. Nonresidential building year-to-date rose 6%, as the result of this pattern by segment—commercial building, up 11%; manufacturing building, up 50%; and institutional building, down 3%.  Residential building year-to-date climbed 26%, with single-family housing up 28% and multifamily housing up 18%.  Nonbuilding construction year-to-date dropped 17%, with a steep 62% plunge for electric utilities more than offsetting a 5% gain for public works.

By region, total construction starts in the first 10 months of 2013 showed increases in three of the five major regions—the Northeast, up 19%; the Midwest, up 10%; and the West, up 6%. Total construction declines were reported in the South Central, down 1%; and the South Atlantic, down 5%. 

The South Atlantic slide reflected the comparison to the first 10 months of 2012, which included the start of two massive nuclear facilities. If electric utilities are removed from the year-to-date construction statistics in the South Atlantic, then total construction for that region in 2013 would be up 20%.