December 2011 contracts decrease 3 percent

McGraw-Hill Construction, a division of The McGraw-Hill Cos., New York, has reported construction starts decreased 3 percent in December 2011. During 2011, total construction was down 2 percent compared with a 1 percent gain in 2010.

“The pace of new construction starts continues to fluctuate within a set range, showing stability in a broad sense but not yet making the transition to renewed expansion,” says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “Gains for a few project types are being offset by continued weakness for other project types, with the result that total construction is experiencing an extended bottom.

“During 2011, stronger activity was reported for multifamily housing, manufacturing plants, electric utilities and even some commercial property types (hotels and warehouses),” he continues. “These gains were countered by further declines for the publicly financed parts of the construction industry, institutional building and public works, as well as by more weakness for single-family housing. For 2012, it’s expected there also will be a mixed pattern by project type. The pluses may be able to outweigh the minuses should the recent pickup in employment growth be accompanied by greater real estate lending by the banking industry, but this year also will see the constraint of diminished federal and state funding support for construction programs.”

Nonresidential building construction basically was unchanged in December 2011. In the commercial category, hotel construction increased 65 percent; warehouse construction climbed 42 percent; store construction rose 4 percent; manufacturing plant construction dropped 3 percent; and office construction fell 26 percent. In the institutional category, public buildings surged 118 percent; transportation terminals climbed 98 percent; educational buildings grew 9 percent; churche construction was unchanged; amusement-related construction decreased 12 percent; and health care facility construction plunged 55 percent.

Residential building construction rose 2 percent in December 2011. Single-family housing increased 2 percent, and multifamily construction held steady.

Nonbuilding construction decreased 10 percent in December 2011.

During 2011, nonresidential building decreased 4 percent compared with 2010. Residential building was up 2 percent, and nonbuilding construction decreased 3 percent. By geographic region, the West and South Atlantic grew 6 percent; South Central decreased 4 percent; Midwest dropped 9 percent; and Northeast fell 12 percent.