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June contracts decrease 1 percent

McGraw-Hill Construction, a division of The McGraw-Hill Cos., New York, has reported construction starts decreased 1 percent in June. Total construction starts in June were down 2 percent compared with June 2012.

“The first half of 2013 revealed a mixed performance by project type, producing a hesitant pattern for total construction starts,” says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “On the plus side, the housing market continues to strengthen, and it should be able to register further gains this year even with the recent hike in mortgage rates. Commercial building continues to slowly advance, and public works construction to this point has not seen much dampening as the result of the sequester.

“However, on the negative side, the retreat for institutional building has turned out to be steeper than expected; manufacturing plant construction has weakened; and new electric utility starts have plunged from last year’s record pace,” he continues. “Assuming the downward pull from the negative sectors in this year’s first half becomes less severe in the second half, then total construction starts for all of 2013 should still be able to register growth but at just a single-digit pace in similarity to 2012.”

Nonresidential building construction fell 2 percent in June. In the commercial category, office construction jumped 44 percent; store construction decreased 6 percent; warehouse construction slipped 7 percent; manufacturing plant construction fell 19 percent; and hotel construction dropped 29 percent. In the institutional category, churches climbed 29 percent; transportation terminal construction grew 24 percent; educational building construction rose 11 percent; amusement-related construction increased 2 percent; health care facility construction dropped 13 percent; and public buildings fell 33 percent.

Residential building construction fell 4 percent in June. Single-family housing increased 1 percent, and multifamily construction fell 20 percent.

Nonbuilding construction rose 4 percent in June.

During the first six months of 2013, nonresidential building decreased 9 percent compared with the same time period in 2012. Residential building was up 28 percent, and nonbuilding construction decreased 24 percent. By geographic region, the South Central grew 8 percent; Northeast increased 7 percent; West grew 4 percent; Midwest decreased 5 percent; and South Atlantic fell 18 percent.

(From NRCA Newsletter)