The three principal privately compiled reports on future construction activity-from
McGraw-Hill Construction, Reed Construction Data and the American
Institute of Architects-were all negative this month.
On Oct. 18, Reed reported that the YTD value of nonresidential U.S. construction
starts was 18% higher than in 2006. September starts were down 8.6% from
August. “Because September is seasonally weaker than August, the month-to-month
decline may not include any negative impact spilling over from the liquidity
problems set off by the collapse of the subprime residential mortgage market.
Nonetheless, the persistent surge in starts since early 2007 may be ending. The
starts growth trend appears to be ebbing down to only a small margin over the
rate of project cost inflation.” Both nonresidential building and “heavy
engineering” were up 18% YTD. MHC and Reed collect data independently. Both
report the full value of new contracts at time of start, whereas the Census Bureau
reports construction spending over a project’s duration.