New construction starts in September increased 1% to a seasonally adjusted annual rate of $518.3 billion, according to McGraw-Hill Construction Dodge, a division of The McGraw-Hill Cos. September showed a mixed performance by the construction industry's main sectors--nonresidential building lost momentum, housing was essentially steady at a high volume, while nonbuilding construction surged upward due to the start of three large power plants. Over the first nine months of 2003, total construction registered a 1% gain compared to the same period a year ago.
September's data produced a 156 reading for the Dodge Index following a revised 154 for August. During the first five months of 2003, the Dodge Index had averaged 149, slightly below the 151 mean for all of last year. In June the Index jumped to 163, as projects that were deferred in the early months of 2003 reached the construction start stage, followed by readings for the Index in the range of 154-158 over the next three months.
"New construction starts are now moving at a pace slightly above last year," stated Robert Murray, vice president of economic affairs for McGraw-Hill Construction Dodge. "Residential building continues to be very strong, and the shortfall for nonresidential building and nonbuilding construction compared to last year has narrowed as 2003 has proceeded."
Nonbuilding construction in September surged 23% to $95.9 billion, the second highest volume for this sector in 2003 after June. Highways and bridges rebounded 7% following a slower pace in July and August. Support came from the start of a $143 million segment of the Woodrow Wilson Bridge in the Washington, D.C., area and a $119 million segment of the T-REX transportation project in Denver.
For the first nine months of 2003, nonbuilding construction was down 15% as a result of decreased activity across all the major categories. Highways and bridges were down 8% in the first nine months.
