Construction contracting advances 3 percent in April

Compared to the previous month, moderate improvement was registered by each of the industry's three main sectors - nonresidential building, residential building, and nonbuilding construction.

March showed single family housing settling back to a more sustainable pace. but it also featured a retreat for public works as well as further weakening for commercial building. "The partial rebound in April suggests that construction activity in 2002 is stabilizing close to the level of the prior year," stated Robert A, Murray. vice president of economic affairs for McGraw-HilI Construction. "It's true that new construction starts are no longer seeing the 4 percent to 5 percent rate of growth that occurred during 2000 and 2001, but contracting in a broad sense is avoiding a protracted decline. Continued strength for single family housing in 2002, with added support from institutional building and public works. is helping to offset a diminished volume of commercial building."

Nonresidential building in April was reported at $152.1 billion, up 3 percent School construction continued its robust performance, rising 18 percent. Other institutional categories showing April gains were religious buildings (up 10 percent) and healthcare facilities (up 2 percent), while decIines were reported for amusement-related projects (down 15 percent), courthouses and detention facilities (down 20 percent) and transportation tenninals (down 57 percent).

The commercial side of the nonresidential market witnessed a mixed pattern in April. Growth was reported for stores (up 9 percent) and offices (up 5 percent), but warehouses and hotels were down 11 percent and 7 percent, respectively. After an extremely weak March, manufacturing plant construction rebounded 48 percent in April; however, the level of contracting for this category was still 30 percent below its depressed pace for all of 2001.

Residential building, at $232.0 billion, increased 2 percent in April. Single family housing rose a slight 1 percent in dollar volume, while multifamily housing posted a 5 percent gain. Single family housing is down 8 percent from its exceptional pace during the first two months of 2002, but it remains in healthy condition - April's rate of contracting was still 7 percent above the average in 2001. By region, residential building in April showed this pattern - the Midwest, up 12 percent; the South Central, up 7 percent; the Northeast, up 6 percent; the South Atlantic, down 3 percent; and the West, down 5 percent.

Nonbuilding construction in April grew 7 percent to $100.3 billion. Most of the upward momentum came from a 218 percent jump for electric utility construction, following a subdued March.