Quarry Equipment Marketplace

APR 2015

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Page 21 of 51

A t a seasonally adjusted annual rate of $724.3 billion, new construction starts in February advanced 16 percent compared to the previous month, according to Dodge Data & Analytics. Much of the lift came from three massive projects valued each in excess of $1 billion that were included as February construction starts. Highway and bridge work advanced 12 percent. The nonbuilding construction sector was boosted by an $8.4 billion liquefed natural gas (LNG) export terminal in Louisiana and a $1.2 billion solar power facility in California, while nonresidential building registered a sharp gain partly as the result of a $3.0 billion petrochemical plant in Texas. Residential building also strengthened in February, as growth for multifamily housing outweighed a loss of momentum by single-family housing. "Due to the presence of several unusually large projects, the frst two months of 2015 witnessed an especially elevated level of activity that's exceeded the underlying trend for construction starts," stated Robert A. Murray, chief economist for Dodge Data & Analytics. "Some pullback can be expected in coming months, since there are only a limited number of LNG-related projects that may reach the construction start stage and petrochemical plants are not likely to match the exceptional amount that was reported last year, particularly with the recent decline in oil prices." "At the same time, the frst two months of 2015 have shown several noteworthy features that point towards the continued expansion for overall construction activity," Murray continued. "For commercial building, both offce buildings and hotels are continuing to track upward, supported by the increasing amount of private fnancing directed at real estate development. For institutional building, school construction is now seeing the benefts of large school construction bond measures that were approved in recent years, while healthcare facilities registered an unexpectedly strong performance in February. For residential building, multifamily housing continues to show brisk development activity in major cities. One area of concern for overall construction activity in 2015 relates to single-family housing – will it be able to move beyond the extended plateau that took hold in 2014? Another area of concern relates to public works and specifcally highway and bridge construction – will Congress be able to reach agreement on a new multiyear federal transportation bill by the end of May, or at the very least a continuing resolution that shores up the depleted Highway Trust Fund?" Nonbuilding Construction Nonbuilding construction in February increased 9 percent to $253.8 billion (annual rate), which followed its substantial 92 percent hike in January. The electric utility and gas plant category in February topped its heightened January amount by 17 percent, with the inclusion of the Sempra LNG export terminal in Hackberry, La., at an estimated construction start cost of $8.4 billion. (In January, two segments of an LNG export facility in Freeport, Texas, valued at $6.0 billion were included as construction starts.) Other large projects that lifted the electric power and gas plant category in February were the $1.2 billion Stateline Solar Farm in California, a $675 million natural gas-fred power plant in Maryland, and another solar power facility in California valued at $450 million. Public works construction as a group improved 2 percent in February, with a substantial push coming from highways and bridges which advanced 12 percent. Large highway and bridge projects in February were led by several in the New York metropolitan area – a $283 million tunnel rehabilitation in Brooklyn, a $213 million toll plaza rehabilitation at the RFK Bridge in the Bronx, and a $96 million toll plaza improvement project on the New Jersey Turnpike in Bayonne, N.J. The environmental public works categories in February were mixed, with river/harbor development up 29 percent, sewer construction up 4 percent, and water supply construction down 3 percent. The miscellaneous public works category, which had been boosted in January by the start of the $350 million Sun Life Stadium modernization in the Miami area, fell 33 percent in February. Nonresidential Building Nonresidential building, at $224.9 billion (annual rate), surged 42 percent in February after a relatively weak performance in January. The manufacturing building category was a major contributor, soaring 663 percent in February with $3.0 billion for the estimated construction February Construction Starts Jump 16 Percent Page 20 QEM – Quarry Equipment Marketplace April 2015

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