New construction starts in December climbed 19 percent to a seasonally adjusted annual rate of $450.2 billion, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. Nonresidential building rebounded after a weak November, and Nonbuilding Construction was lifted by the start of several large electric utility projects. Gains were registered by highway construction, which rose 7 percent. Meanwhile, residential building in December showed slight growth, continuing the gradual upward trend of recent months.
For 2010 as a whole, total construction starts dropped 2 percent to $412.5 billion, a less-severe decline than the 24 percent plunge for 2009. Highway construction (the largest public works category) was still able to post a 3 percent gain for the year as a whole.
“The construction start statistics during the past year fluctuated over a set range, with December coming in at the high end of that range while November was at the low end,” said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “In effect, the pace of contracting has stabilized, after the steep correction of prior years, although renewed expansion for total construction has yet to take hold given this ongoing up-and-down pattern. The year 2010 did include some positive developments, such as the initial stage of recovery for housing while the rate of descent for commercial building eased. However, institutional building lost further momentum, and public works construction began to retreat. For 2011, overall construction activity would benefit if the U.S. economy can show more solid job growth and loan availability improves, but tight government budgets will remain a constraint.”