At a seasonally adjusted annual rate of $444.9 billion, new construction starts in May retreated 16 percent from the previous month, reported McGraw-Hill Construction, a division of The McGraw-Hill Companies. The decline followed substantial gains for total construction in March (up 23 percent) and April (up 11 percent); residential building in May continued its moderate upward path. During the first five months of 2012, total construction starts on an unadjusted basis came in at $180.3 billion, up 6 percent from the same period a year ago.

According to the announcement, the May statistics produced a reading of 94 for the Dodge Index (2000=100), down from 112 in April and 102 in March, but still 3 percent above the full year 2011 average of 92 for the Index.

“The overall level of activity so far this year … is actually running slightly behind 2011, but at least the recent trend has been upward after a particularly weak start to 2012,” says Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “The picture of a construction market that’s struggling to achieve upward momentum, with gains for some project types but losses for other project types, continues to hold true. Housing is edging upward, as earlier advances for multifamily housing are now being joined by gradual growth for single-family housing.”

Residential building in May increased 8 percent to $158.9 billion (annual rate). Multifamily housing showed renewed strength after pausing in April, rising 33 percent, with May coming in 35 percent above this category’s average monthly pace during 2011. Single-family housing in May grew 2 percent, and since February 2011 the dollar amount for single-family housing has shown slight gains in 12 out of 15 months. The May volume for single-family housing was 24 percent above its average monthly pace during 2011.

“While single-family housing still remains at an extremely low level, it has been showing small yet steady gains for more than a year now, indicating that its modest upward trend is beginning to acquire some traction,” says Murray.

The 6-percent increase for total construction starts on an unadjusted basis during the first five months of 2012 was the result of greater activity for two of the three main construction sectors. Residential building year-to-date advanced 24 percent, with similar growth for single-family housing, up 23 percent, and multifamily housing, up 26 percent.

By geography, total construction starts during the first five months of 2012 showed a large gain in the South Atlantic, up 67 percent. The Midwest showed an 8 percent year-to-date gain, while declines were reported in the Northeast, down 8 percent; the West, down 11 percent; and the South Central, down 14 percent.


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