Through the first five months of 2014, the top five metropolitan areas ranked by the dollar volume of new multifamily projects were: New York City, Washington, D.C., Miami, Los Angeles and Boston.
“While the multifamily recovery has moved into a more mature stage, with smaller annual increases, such market fundamentals as occupancies and rents are still rising, which should encourage more construction growth in the near term,” said Murray.
Single-family housing in May was unchanged from its pace in April and has now shown declining or flat activity in six out of the past seven months. By region, May showed greater single-family construction in the Midwest, the South Atlantic and the West, but declines in the South Central and Northeast.
Murray said, “It’s become apparent that the recent loss of momentum for single-family housing is the result of more than just tough winter weather conditions. While mortgage rates remain quite low, with the 30-year-fixed mortgage rate settling back to 4.1% at the end of May, tight mortgage lending standards are restraining the ability of potential first-time homebuyers to purchase a home.”
Nonbuilding construction in May slipped 1% to $115.7 billion (annual rate). A 31% decline for electric utilities slightly outweighed a 5% increase for public works overall, pulling down May’s nonbuilding total. The largest electric utility projects entered as May starts were a $335-million wind farm in Kansas, a $200-million expansion of a gas-fired power plant in Alaska, and a $112-million gas-fired power plant in Louisiana.
For public works, substantial increases in May were reported for highways, up 23%; and bridges, up 34%; after particularly weak activity was reported for both project types during April.
Large bridge projects entered as May starts included a $146-million bridge renovation in Albany, N.Y., and a $132-million bridge replacement in Kentucky. The top five states for highway and bridge construction during the first five months of 2014 were: Texas, California, Pennsylvania, Illinois, and North Carolina.
The miscellaneous public works category, which includes a diverse set of project types, jumped 72% in May, led by $294 million for rail-related sitework near Grand Central Station in New York City, a $237-million natural gas pipeline in Mississippi, and $118 million for paving and runway work at LaGuardia Airport in New York.
The environmental public works categories registered declines in May from the previous month, with sewers down 22%, water supply systems down 25%, and river/harbor development down 52%.
The 1% drop for total construction starts on an unadjusted basis during the first five months of 2014 relative to last year reflected modest gains for nonresidential building and housing, combined with a double-digit slide for nonbuilding construction.
Nonresidential building during the January-May period climbed 5%, resulting from increases for manufacturing buildings, up 52%; and commercial buildings, up 5%; while the institutional building segment slipped 2%.
Residential building during the first five months of 2014 grew 2%, with multifamily housing up 10% while single-family housing was flat. Nonbuilding construction in the first five months of 2014 was down 13%, with public works falling 8% while electric utilities plunged 35%.
By geography, total construction starts during the first five months of 2014 showed growth in the Northeast and South Central, each up 6%. The other three regions registered year-to-date total construction declines—the West, down 2%; the Midwest, down 4%; and the South Atlantic, down 8%.