Reed Construction Data has announced that the dollar value of construction starts in June, excluding residential activity, surged 34% versus May. The figures are in "current" dollars, meaning they are not adjusted for inflation.
The individual month of June, at $32.0 billion, was one of the strongest in Reed's entire database. To find a similarly high volume, one has to look back at June 2008, just before the Great Recession really took hold.
The one-third increase was an outsized gain, even after taking into account seasonality. Reed's long-term average May-to-June increase has been 4.5%. By comparison, May's month-to-month percentage change was +6.2% and April's -4.5%.
June starts this year compared with June of last year were +14.4%. The year-to-date level of total nonresidential construction starts, at $138 billion, was +2.4% when compared with the same January to June period of 2013.
Nonresidential construction accounts for a considerably larger share than of the total than residential work. The former's proportion of total put-in-place construction in the Census Bureau's May report was 62% versus the latter's 38%.
Reed's construction starts are leading indicators for the Census Bureau's capital investment or put-in-place series.
After a shockingly harsh winter, during which GDP contracted, the U.S. economy is back on an expansionary path with stock market indices near record highs and the unemployment rate close to the nation's 20-year average of 6.0%. Firms in the private sector are feeling more pressure to build new facilities.
The month-to-month leaders among major nonresidential construction categories were commercial +39%, and heavy engineering +34.7%. Institutional work was also up +3.6%, but to a much lesser degree. Industrial starts recorded a large percentage gain, but it came on top of a smaller dollar volume than the other three.
Commercial starts this June were even more impressive, +48.5%, when compared with June of last year. Engineering starts this June versus the same month last year were +13.7%. Institutional starts were -8.1%.
Year to date, heavy engineering (+13%) is out front, followed by institutional (+5.9%). Commercial starts (-14.5%) are still down from last year. Industrial work is 13.5%.
In commercial construction's two largest sub-categories, retail starts were +8.3% month to month, but -8.1% year to date, while private office building starts were +81.6% month to month and +29.6 year to date.
In the institutional category of work, school and college starts were +7.5% month to month and +9.7% year over year. Hospital/clinic starts moved in the opposite direction, -43.2% month to month and -12.3% year to date.
With the exception of dam/marine work, all the sub-categories of heavy engineering construction were ahead both month to month and year to date, with water and sewage work especially strong versus May, +40.2.
Institutional and heavy engineering work have especially close ties to government finances. Washington's deficit is diminishing, although the debt load remains high. At the state and local levels, the ongoing improvement in the overall economy is providing budgetary payoffs.
The nonresidential construction sector will derive benefits from taxes that are increasing naturally. Stronger employment and higher incomes lift income tax revenues; advances in consumer spending yield more sales taxes; and rising home prices translate into improved property taxes.
The value of construction starts each month is summarized from Reed's database of all active construction projects in the U.S. Missing project values are estimated with the help of RSMeans' building cost models.
See Reed Construction Data's full Construction Industry Snapshot here.
Related Stories
| May 29, 2014
7 cost-effective ways to make U.S. infrastructure more resilient
Moving critical elements to higher ground and designing for longer lifespans are just some of the ways cities and governments can make infrastructure more resilient to natural disasters and climate change, writes Richard Cavallaro, President of Skanska USA Civil.
| May 29, 2014
Wood advocacy groups release 'lessons learned' report on tall wood buildings
The wood-industry advocacy group reThink Wood has released "Summary Report: Survey of International Tall Wood Buildings," with informatino from 10 mid-rise projects in Europe, Australia, and Canada.
| May 29, 2014
Five finalists, including SOM and Zaha Hadid, chosen in competition for Sweden's tallest skyscraper
In Sernecke's competition to design Sweden's tallest skyscraper, five finalists have been selected: Manuelle Gautrand Architects, Ian Simpson Architects, SOM, Wingårdhs Arkitektkontor, and Zaha Hadid Architects.
| May 29, 2014
Retail renovation trends: Omni-channel shopping, personalized experiences among top goals of new store designs
In pursuit of enhanced customer experiences, retailers are using Big Data, interactive technology, and omni-channel shopping to transform their bricks and mortar locations.
| May 28, 2014
Video Blog: How today’s construction firms are bridging the BIM gap
Turner Construction and Parsons Brinckerhoff talk about how BIM has revolutionized the way that they conduct projects, and how technology has allowed them to leverage collaboration in such a way that they can work with decentralized teams.
| May 28, 2014
KPF's dual towers in Turkey will incorporate motifs, symbols of Ottoman Empire
The two-building headquarters for Turkey’s largest and oldest financial institution, Ziraat Bank, is inspired by the country’s cultural heritage.
| May 28, 2014
B.R. Fries completes medical center focused on male health
Occupying the building’s entire second floor, the male-centric center is honeycombed with examination and consultation rooms, as well as areas for noninvasive testing.
| May 28, 2014
Moshe Safdie's twin residential towers in Singapore will be connected by 'sky pool' 38 stories in the air [slideshow]
Moshe Safdie's latest project, a pair of 38-story luxury residential towers in Singapore, will be linked by three "sky garden" bridges, including a rooftop-level bridge with a lap pool running the length between the two structures.
| May 27, 2014
Supergreen Venter lab displayed in new walk-through video
ZGF Architects' La Jolla building for genomics pioneer J. Craig Venter and his nonprofit research organization aims to be the first net-zero energy, carbon-neutral biological lab.
| May 27, 2014
America's oldest federal public housing development gets a facelift
First opened in 1940, South Boston's Old Colony housing project had become a symbol of poor housing conditions. Now the revamped neighborhood serves as a national model for sustainable, affordable multifamily design.