Two of construction's three main sectors, nonresidential building and housing, showed improved activity in March over February, while the other sector, nonbuilding construction (public works and utilities) declined, according to the latest report from McGraw-Hill Construction.
"The pattern of total construction starts over the past year has made the transition from steady decline to at least low level stability, with the occasional hint of slight upward movement," said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "After the steep correction witnessed over the past three years, including the 25 percent plunge for 2009 as a whole, the move towards stability marks a noteworthy change. With single family housing now edging up from a very low amount, combined with the recent strength shown by public works, the stage is set for total construction starts in 2010 to register moderate growth. Nonresidential building is also now seeing the occasional pickup, such as what occurred in March, but on balance nonresidential building is still expected to be a drag this year on the emerging recovery for total construction starts."
Nonresidential building in March grew 6 percent from February, including increased activity in healthcare facilities, office construction, manufacturing plant construction, and amusement-related projects. However, school construction declined as many states and municipalities suffered from budget deficits, and transportation terminal construction also dropped along with warehouses and hotels.
Residential building also increased by 6 percent in March, with improvements in both single family housing and multi-family housing projects.
Nonbuilding construction fell 11 percent, including dips in highway and bridge construction, river/harbor development, water supply systems, and electric utilities. However, "miscellaneous" public works, such as pipelines and mass transit, increased in March.
Comparing March 2010 construction activity to that of March 2009, total construction was down 17 percent, including declines in residential building (15 percent), nonbuilding construction (7 percent) and nonresidential building (26 percent).
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