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
| Jul 11, 2013
Skanska exits U.S. Chamber of Commerce over LEED controversy
Skanska USA resigned from the U.S. Chamber of Commerce over the Chamber’s decision to support the American High-Performance Buildings Coalition.
| Jul 11, 2013
DOE releases stricter energy efficiency standards for new federal buildings taking effect in 2014
The Energy Department released stricter energy efficiency standards this month for new federal buildings.
| Jul 11, 2013
Pennsylvania legislators work on bill to update demolition codes following fatal building collapse
Pennsylvania lawmakers are working on a bill to update demolition codes, in the wake of a fatal building collapse in Philadelphia in June.
| Jul 11, 2013
Lawsuit challenges modular apartment project in New York City
A plan to build pre-fab apartment buildings at Atlantic Yards in Brooklyn, N.Y., has been challenged by a lawsuit filed by the Plumbing Foundation in Manhattan Supreme Court.
| Jul 10, 2013
SmithGroupJJR hires Don Posson as Co-director of Sustainable Design
SmithGroupJJR has hired veteran mechanical engineer Don Posson, PE, CCP, CPD, LEED AP, as the firm’s co-director of sustainable design.
| Jul 10, 2013
World's best new skyscrapers [slideshow]
The Bow in Calgary and CCTV Headquarters in Beijing are among the world's best new high-rise projects, according to the Council on Tall Buildings and Urban Habitat.
| Jul 10, 2013
TED talk: Architect Michael Green on why we should build tomorrow's skyscrapers out of wood
In a newly posted TED talk, wood skyscraper expert Michael Green makes the case for building the next-generation of mid- and high-rise buildings out of wood.
| Jul 9, 2013
Where are they now? 40 Under 40 alumni make their mark in D.C.
Every month we’ll be touching base with past 40 Under 40 honorees to see what’s been happening in their professional and personal lives since winning the award. This month, we feature two outstanding professionals: HKS's Shannon Kraus and Roger Chang from Westlake Reed Leskosky.
| Jul 9, 2013
AISC releases Design Guide on Blast Resistant Structures
Design professionals now have a valuable new resource on blast resistant structures with AISC Design Guide No. 26, Design of Blast Resistant Structures.
High-rise Construction | Jul 9, 2013
5 innovations in high-rise building design
KONE's carbon-fiber hoisting technology and the Broad Group's prefab construction process are among the breakthroughs named 2013 Innovation Award winners by the Council on Tall Buildings and Urban Habitat.
