New Construction Starts Up In October

The value of new construction starts edged up 2% in October to a seasonally adjusted annual rate of $413.8 billion, it was reported by McGraw-Hill Construction, a division of The McGraw-Hill Companies.  Much of the upward push was provided by nonbuilding construction, comprised of public works and electric utilities, with an added lift coming from modest growth for housing.  However, nonresidential building in October retreated following its improved contracting in September.  Through the first ten months of 2010, total construction on an unadjusted basis came in at $350.4 billion, down 3% from a year ago.


The October data produced a reading of 88 for the Dodge Index (2000=100), up from September’s 86.  Over the course of 2010, the Dodge Index has hovered between 82 and 94.  “This year’s pattern shows activity fluctuating within a set range, consistent with the belief that construction starts have now stabilized at a low level,” stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction.  “At the same time, there’s yet to be evidence that renewed expansion on a sustained basis is about to take hold.  The emerging recovery for housing has proven to be halting, and commercial building is still in the process of bottoming out.  While public works in 2010 has moved at a decent clip, its prospects for 2011 are less favorable, given fading stimulus support and the fact that Congress has yet to pass the appropriations bills for fiscal 2011.”