New Data Shows Broad Gains in Commercial Real Estate Construction

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According to Randyl Drummer at CoStar News, non residential commercial construction posted a 4.5% gain in November over same month last year.  All segments showed solid gains.

Residential commercial construction starts for apartments resulted in the strongest monthly performance in 18 months.

According to Randyl, manufacturing expenditures on new construction was up 12.6% over last year, including retail, warehouse, and farm, was up 12% over a year ago.  Private educational facilities were up 10%, private transportation 9.2% and power 8.4% projects were all well above last year levels.

“Several segments of construction appear to be climbing out of a hole,” said Associated General Contractors of America Chief Economist Ken Simonson. “The new year should reinforce recent year-over-year gains in apartment, power, manufacturing, and private transportation construction.”

Associated Builders and Contractors Chief Economist Anirban Basu agreed that recovery in the nonresidential construction sector was solid and broad based in November, encompassing both private and public construction.

Basu pointed out that the data is seasonally adjusted and part of the improvement may be attributable to the relatively mild weather across the nation in November and extending through December rather than to economic factors.  So far in January the weather appears to remaining mild.

Despite the recent good news, commercial construction faces plenty of economic and financial hurdles, with tight underwriting for construction lending and continued stress on federal, state and local government budgets — “not a good combination to push the nonresidential construction industry out of the doldrums,” Basu said.

CoStar News – Article – New Data Shows Broad Gains in Commercial Construction