January contracts decrease 12 percent

McGraw-Hill Construction, a division of The McGraw-Hill Cos., New York, has reported construction starts decreased 12 percent in January. Total construction starts in January were up 11 percent compared with January 2012.

“The pullback for construction starts in January was not surprising given the up-and-down pattern that was present for much of 2012,” says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “The large increase in December 2012 followed two months of lackluster activity in October 2012 and November 2012, and it’s likely that December 2012 benefited from the start of projects that were earlier put on hold given the uncertain economic and political environment.

“Some of the uncertainty was eased by the Jan. 1 agreement between the Obama Administration and Congress, which averted the fiscal cliff for the time being, as well as by the move by Congress to push back the debt ceiling deadline to May,” he continues. “However, the automatic spending cuts as part of the sequestration process are scheduled to begin March 1, and their implementation is likely to restrain the fragile economic expansion. The upward trend for housing still is expected to continue during 2013, along with modest improvement for commercial building, but this year’s prospects for institutional building and public works remain in doubt.”

Nonresidential building construction fell 20 percent in January. In the commercial category, hotel construction surged 97 percent; warehouse construction advanced 11 percent; store construction decreased 19 percent; office construction fell 27 percent; and manufacturing plant construction dropped 39 percent. In the institutional category, amusement-related construction rose 13 percent; educational buildings declined 9 percent; churches decreased 35 percent; health care facility construction plunged 35 percent; public buildings fell 39 percent; and transportation terminal construction dropped 54 percent.

Residential building construction fell 11 percent in January. Single-family housing slipped 5 percent, and multifamily construction decreased 30 percent.

Non building construction dropped 1 percent in January.

During the 12 months ending in January, nonresidential building decreased 8 percent compared with the 12 months ending January 2012. Residential building was up 30 percent, and non building construction increased 6 percent. By geographic region, the South Atlantic rose 22 percent; South Central grew 12 percent; Midwest increased 8 percent; Northeast increased 8 percent; and West fell 7 percent.