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US construction starts jump in Sept.

Oct 18, 2013 | 02:23 PM | Frank Haflich

Tags  construction starts, nonresidential building, McGraw Hill, Robert Murray, Frank Haflich

LOS ANGELES — U.S. construction starts rose 13 percent in September from the previous month, boosted by a 24-percent jump in nonresidential building and a large steel project in Louisiana.

Construction starts in September hit a seasonally adjusted annual rate of $556 billion, according to the McGraw Hill Construction division of McGraw Hill Financial, New York.

Leading the advance was nonresidential building, typically one of the largest consumers of structural steel, which recovered from a dip in August and rose to an adjusted annual rate of $182.8 billion in September.

Among the biggest gainers in nonresidential construction was the manufacturing plant category, which jumped 289 percent, aided in part by what McGraw Hill described as a $615-million steel facility in Louisiana. This presumably refers to Charlotte, N.C.-based Nucor Corp.’s 2.5-million-ton-per-year direct-reduced iron operation in St. James Parish, which is in the final stage of commissioning.

Institutional building rose 24 percent following a 17-percent decline in August, but commercial building activity dropped 3 percent and warehouse construction fell 34 percent.

"After the downward trend that’s been under way from 2009 through the first half of 2013, the institutional building sector may now be starting to stabilize, which is necessary for total nonresidential building to register growth," said Robert A. Murray, vice president of economic affairs for McGraw Hill Construction.

Nonbuilding construction last month rose 33 percent from August, powered by a 466-percent surge in electric utility building. But residential construction dropped 6 percent as multifamily housing receded 14 percent after rising by the same amount in August.

Despite September’s rise, nonresidential construction in the first nine months of this year was flat compared with the same period in 2012, while residential building was up 26 percent and nonbuilding construction fell 20 percent. Total construction activity was up 2 percent through September, and McGraw Hill’s benchmark Dodge Index rose to its highest level in 2013.

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