LOS ANGELES U.S. construction starts rose 5 percent in October from the previous month, the second consecutive increase, aided by groundbreaking on some large nonresidential projects.
Construction starts in October reached an annual rate of $585.6 billion following a 13-percent jump in September, according to the McGraw Hill Construction division of McGraw Hill Financial, New York.
For the first 10 months of 2013, the value of all starts was up 4 percent, with a 26-percent surge in residential construction and a 6-percent increase in nonresidential construction more than offsetting a 17-percent drop in nonbuilding construction.
Residential construction was up 3 percent in October over September, while nonbuilding construction declined 6 percent, attributed mainly to a 75-percent slump in electric utility construction.
As in the previous month, Octobers overall increase was driven by nonresidential construction, which rose 20 percent to $216.9 billion due primarily to a 147-percent jump in manufacturing plant construction, led by a $1.7-billion natural gas processing plant in West Virginia, a $1.5-billion gasification facility in Louisiana and a $1.7-billion fertilizer plant in Iowa.
While the "large and unusual projects" responsible for the increases in September and October means starts may grow more slowly in the near-term, Octobers data included signs that an underlying trend in construction growth is likely to continue despite last months government shutdown, said Robert A. Murray, chief economist for McGraw Hill Construction.