Masonry Magazine December 1998 Page. 33
September's Rate of Construction Contracting Slips 3 Percent
New York, N.Y. October 28, 1998- Contracting for new construction retreated 3 percent in September to a seasonally adjusted annual rate of $342.8 billion, it was reported by the F.W. Dodge Division of The McGraw Hill Companies. Both housing and nonresidential building registered lower activity compared to August, although nonbuilding construction (public works and utilities) was able to post a moderate gain.
Residential building in September dropped 8 percent to $155.8 billion. Both sides of the housing market registered decreased activity, with single family housing falling 9 percent and multifamily housing down 1 percent. Murray noted, "Single family housing reached its most recent peak in July, buoyed by low interest rates, strong consumer confidence, and the general strength of the economy. But the turbulent stock market from August to the present has raised concern over the future prospects of the economy, and in the process has dampened housing demand to some extent." At the same time, the cost of financing continues to be supportive - fixed mortgage rates averaged 6.7 percent in September, down from 6.9 percent in August. And, given the robust levels of construction reported during the first half of 1998, single family housing this year will record its highest dwelling unit amount since the late 1970s. By region, September showed the following pattern for residential contract value the Northeast, down one percent; the South Central, down 3 percent; the Midwest, down 6 percent; the West, down 10 percent; and the South Atlantic, down 12 percent.
The commercial categories in September generally offered support to the nonresidential total. Although warehouses slipped back 13 percent, office construction held steady with the prior month, hotels advanced 6 percent with the help of a $112 million project in Philadelphia; and stores jumped 33 percent with the help of a $60 million project in Somerset, New Jersey. Murray added, "Store construction in 1998 is likely to approach its peak amount achieved three years ago, due to a number of large shopping center projects reaching the groundbreaking stage this year."
Through the first nine months of 1998, total construction on an unadjusted basis was up 2 percent over the same period a year ago. Residential building maintained an 11 percent lead, while nonresidential building was down 4 percent and nonbuilding construction trailed 1997 by 7 percent. In terms of geography, both the South Atlantic and South Central regions showed 10 percent gains for total construction during the January-September period. The other three major sectors posted declines the Midwest, down one percent; the West, down 3 percent; and the Northeast, down 6 percent.
F.W. Dodge, a business unit of the McGraw-Hill Construction Information Group, has been the nation's leading source of construction information since 1891.
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MASONRY-NOVEMBER/DECEMBER, 1995 33