McGraw-Hill Construction
   subscriptions  •   advertise  •   careers  •   contact us  •   my account  

| RSS Info >>>

forcast and trends
bob murray's monthly report

July Construction Jumps 6%

going over blueprintsNew York, N.Y. – August 20, 2008 – The value of new construction starts advanced 6% in July to a seasonally adjusted annual rate of $578.0 billion, it was reported by McGraw-Hill Construction, a division of The McGraw-Hill Companies.  Led by the start of two massive electric power plants plus healthy gains for several public works categories, the nonbuilding construction sector climbed sharply.  In addition, residential building edged upward, reflecting some strengthening for multifamily projects that offset further weakness for single family housing.  On the negative side, nonresidential building continued to settle back, as groundbreaking for manufacturing plants subsided from the heightened activity witnessed earlier in the year.  For the first seven months of 2008, total construction on an unadjusted basis came in at $337.0 billion, down 14% from a year ago.  Excluding residential building, new construction starts in the first seven months of 2008 were up 4%.

The July statistics lifted the Dodge Index to 122 (2000=100), compared to a revised 116 for June.  “The current year has seen wide swings on a month-to-month basis for both nonresidential building and nonbuilding construction, and in July it was nonbuilding’s turn to surge ahead,” stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction.  “While homebuilding continues to languish, and tighter lending standards are dampening commercial building, there are still project types that are reporting elevated activity to this point in 2008.  For the nonbuilding sector, this includes electric power plants, water supply systems, and river/harbor development.  For nonresidential building, such institutional structure types as schools, dormitories, hospitals, and detention facilities continue to see expansion.”

Nonbuilding construction in July climbed 27% to $176.4 billion (annual rate).  The electric utility category soared 156%, reflecting the July start of two large power plants, located in Tennessee ($2.5 billion) and Virginia ($1.8 billion).  Through the first seven months of 2008, electric utility construction advanced 71% compared to last year, as this category is on track to register the highest level of construction starts since 2001.  The river/harbor development category in July increased 119%, lifted by the start of a $695 million project in New Orleans LA involving protection of the inner harbor as part of the ongoing hurricane reconstruction effort.  Bridge construction in July rose 45%, reflecting a $391 million project in New Orleans LA as well as $132 million for more bridge renovation work in New York NY.  Highway construction in July bounced back 18%, following June’s lackluster pace.  Although sewer construction receded 3% in July, the month did include the start of two major projects – a $305 million sewer tunnel in Marietta GA and a $134 million upgrade to a waste water treatment plant in Miami FL.  The “miscellaneous” public works category, which jumped 77% in June as the result of a large natural gas pipeline project, retreated 55% in July.

Residential building, at $182.5 billion (annual rate), grew 2% in July.  Multifamily housing posted a 22% gain, boosted by groundbreaking for two large projects located in New York NY (valued at $418 million and $239 million), plus a $282 million condominium project in Koloa HI and a $101 million mixed use development in Dallas TX.  Murray noted, “Even with these July entries, the number of large multifamily projects continues to be on a downward trend.  The construction start statistics show that during the first seven months of 2008 there were 18 multifamily projects valued at $100 million or greater that reached groundbreaking, compared to 26 such projects for the same period of 2007.”  Single family housing in July dropped an additional 5%, extending its lengthy correction.  For the first seven months of 2008, the dollar volume for single family housing was 38% below last year.  By region, the largest year-to-date declines for single family housing were reported for the West, down 47%; the South Atlantic, down 40%; and the Midwest, down 37%.  Declines of lesser magnitude were reported for the South Central, down 29%; and the Northeast, down 24%.

Nonresidential building in July retreated 4% to $219.1 billion (annual rate).  Much of the decline was related to an 81% plunge for manufacturing plant construction, which had been boosted in June by the start of a $1.9 billion oil refinery expansion in Michigan.  If the manufacturing plant category is excluded, nonresidential building in July would be up 7%.  Most of the commercial structure types showed improvement in July, marking a brief departure from what has been generally a declining trend in 2008.  Office construction climbed 28%, aided by two large data centers located in Fort Worth TX ($155 million) and Piscataway NJ ($150 million).  In addition, July’s office total included $120 million for the office portion of a $370 million mixed use project in Boston MA and $120 million for an office building in West Des Moines IA.  Stores and warehouses in July witnessed gains of 13% and 17%, respectively, although year-to-date both structure types remained down more than 20%.  Hotel construction was the one commercial structure type to weaken in July, dropping 25%.

On the institutional side of the nonresidential market, healthcare facilities rebounded 33% from a weak June, helped by the July start of large hospital projects in Elmhurst IL ($300 million), Chicago IL ($225 million), and Omaha NE ($83 million).  While the healthcare category has shown an up-and-down pattern so far in 2008, through the first seven months it’s holding onto a 10% lead in dollar terms over last year.  The public building category in July increased 8%, with large detention facility projects in North Charleston SC ($95 million) and Grayson VA ($88 million), and amusement-related construction grew 6%.  The educational building category in July was steady with its June pace, while dormitories settled back 5%.  Both structure types maintained dollar volume gains for the first seven months of 2008 versus last year, with educational buildings up 6% and dormitories up 33%.  Churches and transportation terminals witnessed reduced contracting in July, sliding 32% and 38%, respectively.

For the first seven months of 2008, the 14% decline for total construction compared to last year was the result of a 38% shortfall for residential building, outweighing gains of 1% for nonbuilding construction and 6% for nonresidential building.  The improved level for nonresidential building was supported by a 104% surge for manufacturing plant construction year-to-date, reflecting the start of three massive oil refinery expansions valued at a combined $12.7 billion.  The institutional structure types in the first seven months of 2008 were up 7% in dollar terms, but the commercial structure types were down 9%.  By region, total construction in the January-July period of 2008 showed decreased activity in the Midwest, down 12%; and the South Atlantic and West, each down 25%.  The Northeast and South Central were each up a modest 2% year-to-date.

About McGraw-Hill Construction
McGraw-Hill Construction connects people, projects, and products across the design and construction industry.  From project and product information to industry news, trends and forecasts, the company provides industry players the tools, resources, and applications that help them save time, money, and energy.  Backed by the power of Dodge, Sweets, Architectural Record, Engineering News-Record (ENR), and its Regional Publications, McGraw-Hill Construction serves more than one million customers within the $4.6 trillion global construction community. For more information, visit

July 2008 Construction Starts



Prepared by McGraw-Hill Construction Research & Analytics 

Monthly Construction Starts
Seasonally Adjusted Annual Rates, In Millions of Dollars

  July 2008 June 2008 % Change
 Nonresidential Building $219,146 $228,317 -4
 Residential Building 182,485 179,570 +2
 Nonbuilding Construction 176,405 139,194 +27
 Total Construction $578,036 $547,081 +6

The Dodge Index
(2000=100, Seasonally Adjusted)

July 2008.............................................122
June 2008...........................................116

Unadjusted Totals, In Millions of Dollars

  7 Mos. 2008 7 Mos. 2007 % Change
 Nonresidential Building $146,272 $137,735 +6
 Residential Building 106,323 171,269 -38
 Nonbuilding Construction 84,445  83,369 +1
 Total Construction $337,040 $392,373 -14




Deconstructing the
Remodeling Market
Deconstructing the Residential Remodeling Market
An in-depth look at
the $200+ billion
construction market.

Greening of Corporate
SmartMarket Report.
Greening of Corporate America SmartMarket Report.
New research
and intelligence on
green building
activities in the
health care
construction sector.
Click here to buy


 |   |   |   |   | 
2017 © The McGraw-Hill Companies, Inc.
All Rights Reserved