New construction starts increased 1% in June to a seasonally adjusted annual rate of $565.1 billion, according to McGraw-Hill Construction, a division of The McGraw-Hill Cos. Nonbuilding construction (public works and electric utilities) rebounded after a weak May and offset the mild slippage registered in June by nonresidential building and housing. During the first six months of 2004, total construction on an unadjusted basis was reported at $286.2 billion, a 10% gain compared to the same period a year ago.
The June statistics raised the Dodge Index to 170, up from a revised 168 for May. The current year began on a sluggish note, as the Dodge Index slipped back to 160 following its average of 169 during the final three months of 2003. Since January, new construction starts have seen gradual improvement, regaining the elevated level that was achieved at the end of last year.
"June was helped by a stronger volume of public works construction, which so far in 2004 has been one of the weaker construction sectors," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "While June's upturn for public works was a welcome development, this sector going forward will still be limited by tight fiscal conditions for the federal and state governments."
Nonbuilding construction in June jumped 22% to $96.1 billion. Gains were reported for most of the public works categories, including highways (9%) and bridges (13%).
During the first six months of 2004, nonbuilding construction was 4% below the corresponding 2003 period. Highways, down 11%, and bridges, down 29% registered the most pronounced weakness.
