editorial

August Construction Falls 9 Percent

At a seasonally adjusted annual rate of $540.6 billion, new construction starts in August dropped 9 percent, according to McGraw Hill Construction, a division of McGraw Hill Financial. The decline followed July’s elevated volume, the strongest so far in 2014, and brought activity back to the average pace reported during the first seven months of this year.

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Highway Construction Drops Again; Total New Construction Rises

Highway construction work dropped sharply in June and July, wiping out market gains from the previous seven months amid uncertainty over the federal aid highway program and the Highway Trust Fund, according to the American Road & Transportation Builders Association. The decline can be specifically attributed to longterm congressional inaction on deficiencies in the Highway Trust Fund, and Congress’s inability to agree on a new highway bill. President Obama has signed a $10.8 billion temporary measure that will fund highway and bridge repairs for the next 10 months, however that is not enough to give the highway construction market the long-term confidence it needs.

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Aggregates; Construction Markets Rising Higher

As debate over a new highway bill and an increase in gas taxes to support the highway trust fund heat up in Congress, both the aggregates and construction markets started off the summer with bang. The estimated U.S. output of construction aggregates produced and shipped for consumption in the first quarter of 2014 was 370 metric tons (Mt,) an increase of 7 percent compared with that of the same period of 2013, according to the U.S. Geological Survey. “The revised estimated annual output produced for consumption in 2013 was 2.03 billion metric tons (Gt,) still a slight increase compared with the reported annual output for 2012,” said Construction Aggregates Commodity Specialist Jason Willett.

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June Construction Jumps 6 Percent

New construction starts in June advanced 6 percent to a seasonally adjusted annual rate of $549.7 billion, the highest level so far in 2014, according to McGraw Hill Construction, a division of McGraw Hill Financial. Nonresidential building strengthened after pulling back in May, with the lift coming from the start of several large manufacturing plant projects. Modest gains in June were also reported for housing and nonbuilding construction (public works and electric utilities). New highway construction starts in June improved 6 percent. During the first six months of 2014, total construction starts on an unadjusted basis were $254.1 billion, up 1 percent from the same period a year ago.

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Construction Market Shakes Off Weather Concerns

Although some recent indicators point to a tempering of the U.S. economy, The Portland Cement Association (PCA) is maintaining its forecast for steady growth in construction and cement consumption during the next five years, starting with a projected 7.9 percent increase this year in powder shipments, nearly double the 4.5 increase the industry logged in 2013 over prior-year volume.

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