Quarry Equipment Marketplace

MAR 2018

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Page 19 of 47

Page 20 QEM – Quarry Equipment Marketplace March 2018 March 2018 QEM – Quarry Equipment Marketplace Page 20 Q E M Q uarry Equipment M a r k e tpl a ce ¨ January Construction Starts Slip 2 Percent The value of new construction starts in January receded 2 percent to a seasonally adjusted annual rate of $725.9 billion, easing slightly after December's 13 percent hike, according to Dodge Data & Analytics. The nonbuilding construction sector, comprised of public works and electric utilities/gas plants, pulled back 18 percent after surging 45 percent in December, as that month was boosted by the start of the $2.3 billion I-66 Corridor Improvements Project in northern Virginia and a $992 million transmission line project in California. At the same time, nonresidential building edged up 1 percent in January, supported by groundbreaking for the $1.3 billion domed stadium in Las Vegas that will be the new home for the NFL's Oakland Raiders once construction is completed prior to the 2020 season. In addition, residential building climbed 7 percent in January, helped by a rebound for multifamily housing after three straight months of declines. On an unadjusted basis, total construction starts in January were $52.2 billion, down 7 percent from the same month a year ago. On a 12-month moving total basis, total construction starts in the 12 months ending January 2018 were up 2 percent from the 12 months ending January 2017. By geography, total construction starts for January 2018 relative to January 2017 registered this pattern – the Northeast, down 36 percent; the West, down 10 percent; the South Central, down 9 percent; the South Atlantic, unchanged; and the Midwest, up 42 percent. "Although the expansion for the construction industry lost some momentum during 2017, on a broad level it can be characterized as deceleration as opposed to decline," stated Robert A. Murray, chief economist for Dodge Data & Analytics. "January's level of activity, which held close to last year's mid-range, is consistent with the picture of a decelerating expansion. The factors affecting construction activity going forward in 2018 have become more varied. Some dampening may come from higher material prices and tight labor markets, yet while interest rates are rising the increases are expected to stay moderate this year. The tax reform legislation is anticipated to lift economic growth in the near term, which may benefit commercial building and manufacturing construction starts. The Trump Administration has provided the outline of an infrastructure program, but the details need to be worked out by Congress against the backdrop of a growing federal budget deficit, which may limit any benefit this year for public works. One plus for 2018 is that the institutional side of nonresidential building should stay close to last year's elevated pace." Nonbuilding Construction Nonbuilding construction in January was $153.8 billion (annual rate), down 18 percent from December's heightened amount. The public works categories as a group fell 15 percent, with a substantial 34 percent drop for highway and bridge construction which had soared 66 percent in December with the start of the $2.3 billion I-66 Corridor Improvements Project in northern Virginia. In January, the largest highway and bridge projects were smaller in scale – a $230 million bridge in Tampa and a $105 million highway interchange upgrade in Virginia Beach, Va. Reduced activity was also reported in January for sewer construction and water supply construction, each with 26 percent declines. The miscellaneous public works category, which includes pipelines and mass transit projects, climbed 20 percent in January as the $2.0 billion NEXUS natural gas pipeline in Ohio and Michigan was entered as a construction start. The dollar amount of new pipeline projects during 2017 shot up 90 percent to $22.3 billion, and while that amount may not be equaled in 2018, January's NEXUS pipeline project shows that at least for the near term major pipeline projects continue to reach the construction start stage. River/harbor development work also strengthened in January, advancing 19 percent with the lift coming from $260 million for the harbor deepening project in Charleston, S.C., and a $240 million lock replacement project in Chattanooga, Tenn. The often-volatile electric utility/gas plant category plunged 39 percent in January, following December's 93 percent increase. Even with the decline, January included the start of an $872 million gas- fired power plant in Louisiana and a $260 million solar power facility in Texas. Nonresidential Building Nonresidential building in January was $240.8 billion (annual rate), a slight 1 percent rise on top of December's 10 percent gain. The institutional categories as a group rose 8 percent, led by a 149 percent jump for amusement- related projects.

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