November Construction Slides 11 Percent
December 22, 2011

At a seasonally adjusted annual rate of $417.6 billion, new construction starts in November dropped 11 percent from October's elevated pace, according to a December 21 news release from McGraw-Hill Construction.

Nonresidential building retreated after being boosted in October by the start of a massive manufacturing plant, and nonbuilding construction showed electric utilities pulling back from the brisk pace of recent months. Meanwhile, residential building in November registered moderate growth, helped by further strengthening for multifamily housing. During the first 11 months of 2011, total construction on an unadjusted basis was reported at $390.5 billion, down 2 percent from the same period a year ago.

Nonresidential building in November fell 20 percent to $142.4 billion (annual rate), following its 36 percent surge in the previous month. The largest decline was reported for the manufacturing plant category, which plunged 72 percent from October. For commercial building, office construction in November retreated 26 percent from October. Stores and warehouses weakened in November, with respective declines of 9 percent and 16 percent, while hotel construction was flat.

The institutional categories showed mixed behavior in November. Healthcare facilities jumped 41 percent. The educational building category, down just 1 percent, was essentially steady in November.

Residential building in November advanced 4 percent to $138.2 billion (annual rate). Like recent months, multifamily housing provided the upward momentum, rising 25 percent.

uring the first 11 months of 2011, multifamily housing was up 17 percent, as the result of this year-to-date performance by geography - the West, up 33 percent; the South Atlantic, up 27 percent; the Northeast, up 19 percent; the South Central, up 10 percent; and the Midwest, down 1 percent.

The 2 percent decline for total construction starts at the national level during the first 11 months of 2011 was reflected in a mixed performance at the five region level. Year-to-date declines for total construction were shown by three regions - the South Central, down 4 percent; the Northeast, down 11 percent; and the Midwest, down 12 percent.

Year-to-date gains were shown by two regions - the South Atlantic, up 5 percent; and the West, up 10 percent, with particularly large increases for new electric utility starts helping the total construction amount for each region.

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