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Construction starts rise but nonresidential lags

Keywords: Tags  construction starts, steel, nonresidential construction, Robert Murray, McGraw Hill, structural sections, steel plate, structural pipe and tubing Frank Haflich

LOS ANGELES — U.S. construction starts moved up in August, but one sector considered crucial to steel consumption—nonresidential construction—fell.

Starts last month rose 2 percent over July to a seasonally adjusted annual rate of $490.2 billion, according to McGraw Hill Construction, a division of McGraw Hill Financial Inc., New York.

Residential building activity rose 4 percent in August while nonbuilding construction—which includes public works and electric utilities—reversed a July downturn with an 11-percent surge, McGraw Hill said.

But nonresidential construction, which is critical to structural sections, plate and structural pipe and tubing, fell 8 percent in August to an annual rate of $148 billion after rising 9 percent in July.

"A more solid expansion for total construction requires a greater contribution from nonresidential building, which has yet to occur," Robert Murray, McGraw Hill Construction’s vice president of economic affairs, said in a statement.

One service center executive said that while his company hasn’t yet seen a sustained improvement in its eastern nonresidential construction markets, he sees "money on the sidelines" eager to finance new projects. But political deadlock in Washington is undermining the stable outlook that’s necessary before those projects get the green light, he said.

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