New construction starts in September advanced 10 percent to a seasonally adjusted annual rate of $604.1 billion, according to McGraw Hill Construction, a division of McGraw Hill Financial. The increase followed an up-and-down pattern during the previous two months, and brought activity to its highest level so far during 2014.

Highways and bridges each climbed 8 percent in September.

Nonresidential building registered a sharp gain, helped by an elevated pace for several institutional categories plus another brisk month for manufacturing plants, while the nonbuilding construction sector (public works and electric utilities) also strengthened. Running counter in September was a decline for residential building. During the first nine months of 2014, total construction starts on an unadjusted basis were $419.5 billion, a 5 percent gain compared to last year.

“While the progress for construction starts has been uneven at times on a month-to-month basis, the quarterly averages show that an upward trend has been re-established,” stated Robert A. Murray, chief economist for McGraw Hill Construction. “In this year’s first quarter, construction starts fell back 10 percent, but then climbed 6 percent in the second quarter and another 6 percent in the third quarter. A key factor in keeping the construction expansion going in 2014 has been the greater role now being played by nonresidential building. Commercial building has continued to see moderate growth from low levels, and the manufacturing building category is still showing a surge of chemical and energy-related plants reach groundbreaking. What’s different in 2014 is that the institutional structure types are now beginning to contribute to the nonresidential building upturn. In contrast, both public works and electric utilities have generally lost momentum during 2014, notwithstanding their strong showing in September. And, residential building is now providing a much smaller lift than in the past two years, as the sluggish performance by single-family housing has outweighed further gains by multifamily housing.”