May construction climbs 4 percent
New construction starts increased 4 percent in May to a seasonally adjusted annual rate of $496.6 billion, according to the Dodge Division of McGraw-Hill Construction, New York. Greater activity was reported across the industry's three main sectors – nonresidential building, residential building and nonbuilding construction.
The latest month's data raised the Dodge Index to 150, compared to a revised 144 for April. "The improved activity I April and May shows the construction industry climbing back to last year's pace, when the Dodge Index averaged 149," said Robert Murray, vice president of economic affairs for McGraw-Hill Construction. "However, this year is seeing a different mix by project type – more single family housing and public works, while commercial building remains well below the levels reported in the early months of 2001."
Nonresidential building in May climbed 6 percent to $156.6 billion, helped by strong gains for several institutional categories. Commercial construction registered some improvement in May, with hotels up 5 percent, stores up 8 percent and warehouses up 16 percent.
Residential building, at $238.5 billion, was up 2 percent in May. The increase was the result of a 1 percent gain for single family housing, combined with a 13 percent pickup for the multifamily side of the market.
Nonbuilding construction in May grew 3 percent to $101.6 billion. Much of the upward push came from a 19 percent gain for electric utilities, rising for the second straight month after sharply reduced contracting in February and March.
During the first five months of 2002, total construction on an unadjusted basis maintained a 1 percent lead over the same period of 2001. In terms of geography, total construction showed this pattern during the January-May period – the Northeast and Midwest, each up 7 percent; the South Atlantic, up 6 percent; the West, down 4 percent; and the South Central, down 10 percent.