The upward momentum of construction activity created in March and April saw a slight dip in May. McGraw Hill Construction chief economist Robert A. Murray says that’s no reason to panic.
Nonresidential building starts in May fell five percent to $192.2 billion after a 15 percent jump in April, according to McGraw Hill.
“May’s retreat does not necessarily mean that renewed expansion is stalling,” says Murray. “The downturn for nonresidential building in May was the result of a sharp pullback by the often-volatile manufacturing plant category after its huge gain in April.
“Residential building has often reflected the monthly up-and-down pattern for multifamily housing, which despite a setback in May can still be viewed as trending upward. Of more concern for residential building is single family housing, which has yet to move beyond its recent plateau and resume growth.”
Manufacturing plant construction in May plunged 87 percent after being lifted in April by the start of several large projects, including a $3 billion ethylene plant in Texas. In contrast, the largest manufacturing project reported as a May start was an $80 million manufacturer-owned research laboratory in New Jersey.
Commercial building showed strong growth in May, climbing 31 percent, led by gains for offices and hotels. Office construction in May surged 94 percent, led by the start of the massive new headquarters for Apple Inc. in Cupertino, Calif., with $2.3 billion estimated for the office portion of the project’s $2.5 billion construction cost.