Wednesday, September 29, 2010

MHC, Reed and AIA (ABI) offering differing views .....

From an article posted on AGC's site (under "construction economics); date of article was Sep 24, 2010....

McGraw-Hill Construction (MHC) and Reed Construction Data offered differing estimates of new construction starts in Augusts, based on data they separately compiled. MHC said on Tuesday that total starts increased 6% from July to August at a seasonally adjusted annual rate but were down 4% year-to-date (YTD) for January-August 2010 compared with the same months of 2009. "After languishing in late spring, the pace of construction starts picked up during July and August, returning activity to the upper half of its recent range," stated Robert A. Murray, vice president of economic affairs for MHC. "That range shows total construction starts essentially stabilizing at a low level, relative to its lengthy slide from 2006 through 2008, but not yet moving up to the point where one could say that renewed expansion is taking hold." Of the three MHC components, nonresidential building starts fell 4% in August and 14% YTD, with commercial building down 23%; manufacturing building, down 30%; and institutional building, down 8%. Nonbuilding construction jumped 24% for the month but dropped 4% YTD, with flat activity for public works being countered by a 27% YTD decline for electric utilities. Residential building slipped 2% in August but advanced 11% YTD. Total nonresidential starts were down 9% YTD. Reed reported on September 17 that total nonresidential starts were up "about 5%" in August, seasonally adjusted (22%, unadjusted), and 5% from January through August YTD. The August gain "was entirely in nonresidential buildings, since heavy construction starts fell slightly after seasonal adjustment," Reed Chief Economist Jim Haughey said.

The Architecture Billings Index (ABI), a measure of the number of architecture firms that report higher billings in the previous month than the month before minus the number with lower billings (with the difference centered on 50) inched up in August to 48.2 from 47.9 in July, the American Institute of Architects (AIA) reported on Wednesday. "Project cancelations, regardless of when they happen in the design phase, continue to be the main roadblock to recovery for the construction sector," said AIA Chief Economist Kermit Baker. "Numerous projects have been put on hold indefinitely over the last several months with little hope that they will be resumed. What work…is being done is more along the lines of smaller renovation-type projects, as opposed to design for new buildings." Firms with a predominantly commercial / industrial practice had an ABI of 50.6; multi-family residential, 46.9; institutional, 46.0; and mixed practice, 42.6.

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