At a seasonally adjusted annual rate of $483.6 billion, the value of new construction starts in February slipped 3%, according to McGraw-Hill Construction Dodge, a division of The McGraw-Hill Cos. Each of the construction industry's main three sectors--nonresidential building, residential building and nonbuilding construction--registered moderate declines in February compared to the previous month.
February's data produced a 146 reading for the Dodge Index following January's revised 150. Over the past year, the Dodge Index has hovered around the 150 mark, so February resides within the lower half of the recent range.
"Total construction activity during 2003 is expected to see some loss of momentum, and February's mild setback is consistent with that trend," said Robert Murray, vice president of economic affairs for McGraw-Hill Construction Dodge. "Last year, the brisk pace for single family housing offset weakness for commercial building, but sluggish employment and shaky consumer confidence are beginning to dampen homebuyer demand. Tighter fiscal conditions are now having a restraining impact on institutional building and public works. The commercial structure types remain generally depressed, but on a positive note they're up-and-down pattern of recent months suggests that a leveling-off process is underway."
Nonbuilding construction in February dropped 5% to $86.2 billion. Highway construction plunged 30% from a strong January, which included the start of several large projects around the nation. On the plus side, bridge construction in February jumped 39% buoyed by the start of a $461 million upgrade to the Tacoma-Narrows Bridge in the state of Washington and a $107 million segment of the Bay Bridge project in San Francisco.
