Despite substantial increases, overall construction starts fell slightly in November

Although nonresidential building increased in November, other categories suffered declines significant enough to cause new construction starts to fall 1 percent overall for the month according to McGraw-Hill Construction, a division of the McGraw-Hill Companies.

Among the month’s bright spots, nonresidential building in November increased to $181 billion, a 4 percent increase over the revised October rate of $174 billion. Construction of healthcare facilities rose 31 percent in November while the transportation terminal category surged, increasing by 88 percent over October’s number. Public buildings and school construction were up 25 percent and 1 percent respectively.

Results for the commercial and industrial portions of the nonresidential market were mixed in November. On the positive side of the ledger, warehouse and hotel construction increased by 25 percent and 70 percent respectively for the month. Store construction remained unchanged from October, however, while office construction fell by 7 percent. The largest economic hit was felt in the manufacturing plant category, which registered a 70 percent decline for new construction starts. Analysts attribute this drop to hesitation shown by manufacturers towards adding new production capacity.

Nonbuilding construction dropped 5 percent in November. Helping this decline was the electric utility category, which dropped by 70 percent in November after increasing by 62 percent in October. The public works sector also showed declines for highway and sewer markets, down 7 percent 23 percent, respectively

Residential construction also dipped slightly, falling 1 percent from October’s number.