Construction Activity Slips One Percent in October
October's data produced a reading of 148 for the Dodge Indes (1996=100)), compared to a revised 149 for September. After beginning the year at 153, the Dodge Index receded to 142 by August, so the September and October levels were within the upper half of this year's range of contracting.
Residential building in October decreased 4 percent to $204.4 billion.
Nonbuilding construction, at $113.5 billion, fell 12 percent in October. The comparison is against an exceptionally strong September (up 24 percent over the prior month), and October was still more than 20 percent above the average monthly pace for nonbuilding construction in 2000. Relatively small declines were registered by sewers (down 4 percent), water supply systems (down 2 percent), and river/harbor development (down 1 percent).
Nonresidential building advanced in October by 11 percent to $172.1 billion. The commercial categories in particular showed unexpected gains following depressed contracting during the summer. Hotel construction jumped 73 percent after a very weak September, boosted by the start of a $115 million convention center-related hotel in Houston, TX, and a $75 million casino-related hotel in Henderson, NV. Warehouses were up 29 percent, while office construction grew 16 percent with the help of a $75 million office complex in Torrance, CA. Store construction in October posted a 2 percent gain.
The institutional side of the nonresidential market featured a 7 percent gain for schools, and a 36 percent increase for healthcare facilities. Public buildings (courthouses and detention facilities) were down 12 percent, and amusement-related projects plunged 33 percent. Manufacturing plant construction also fell by 36 percent in October.
Through the first ten months of 2001, total construction on an unadjusted basis was 3 percent higher than the same period in 2000. By major sector, residential building was up 4 percent and nonbuilding construction surged 14 percent, but nonresidential building trailed its 2000 amount by 5 percent. By region, total construction in the Jan.-Oct. period showed this pattern: the South Central, up 6 percent; the West, up 4 percent; the Midwest, up 3 percent; the South Atlantic, unchanged; and the Northeast, down 1 percent.