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More Favorable Comparisons
New construction contract activity advanced slightly in the summer of 2009 compared with some of the year’s earlier months. In terms of year-ago comparisons, the gap has started to narrow because by July and August of last year the construction industry had already slowed down, so newer comparisons are made against a shorter yardstick.

New construction starts in August advanced 2 percent from the previous month, according to McGraw-Hill Construction, Bedford, Mass. The upward push came from non-building or infrastructure construction from the public works and electric utilities sectors. Both housing and nonresidential building in August settled back slightly from improved levels that were reported in July.

"The volume of construction starts remains quite weak, but since March there’s been growing evidence that activity has at least leveled off, and may now be gradually trending upward," says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "Public works construction has seen the early signs of support from the federal stimulus funding, with more strengthening expected in coming months. Single-family housing apparently reached bottom in early 2009, and has now moved upward in six out of the past seven months."

Murray says the only good news in the non-residential building sector is that "the rate of descent has eased from the severe declines witnessed in late 2008 and early 2009. At the same time, nonresidential building still faces considerable constraints, such as mounting vacancies, tight bank lending standards, and eroding state fiscal health."

Infrastructure construction in August jumped 13 percent to $138.9 billion (at an annual rate level). Highway construction climbed 12 percent, and for the first eight months of 2009 that sector’s activity is up 4 percent compared with 2008. While bridge construction retreated 9 percent in August, it has registered a 7 percent increase for the first eight months of 2009 because of earlier gains.

Electric utility construction had a brisk August, soaring 120 percent. Large electric utility projects reported as August starts included a $600 million power plant in Arizona, plus the start of three large wind farms located in Pennsylvania ($400 million), North Dakota ($250 million) and Iowa ($150 million).

Residential building, at $127.2 billion (annual rate), slipped 1 percent in August. Multi-family housing retreated 13 percent from a July that had been aided by groundbreaking for two large projects each valued in excess of $100 million.

Single-family housing in August grew 1 percent, marking the sixth gain in dollar terms out of the past seven months.