Reed starts, IP for construction supplies, materials sales show mixed industry trends

The value of construction starts in January through April 2010 was 11 percenthigher than in the same months of 2009, Reed Construction Data reported on Tuesday [May 11], based on data it compiled. April starts were 6.6 percenthigher than March starts, “a little short of the usual seasonal gain in April. So April has to be interpreted as approximately steady with March,” said Reed chief economist Jim Haughey. “April starts were 25 percenthigher than a year ago but there is no clear signal yet that the economic recovery has reached the construction market. ... The economic environment for construction is clearly improving. Contractors added 40,000 jobs in the last two months. Buildings funded by the stimulus plan are beginning to be started. And the rise in the commercial vacancy rate is now slowing. The post-stimulus slide in heavy project starts continued in April. Starts fell 3.4 percentfrom March and were off 40 percentfrom the stimulus-boosted peak last August. The stimulus impact in the heavy market continues to ebb month to month. But no further significant decline is expected as delayed transportation and water-sewer projects replace slipping highway project starts. April nonresidential building starts were 13 percentabove March, about double the usual seasonal gain, and 31 percenthigher than a year ago [but] 19 percentbelow the 2006 to 2008 average ... the April starts gain was due to a big rebound in hospital starts after four weak months, plus smaller pickups in education and commercial buildings,” according to a May 14 Data DIGest report.

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