This special issue of the ARXX PRO is dedicated to the latest sign of the industry's recovery - New construction starts in December climb 5 percent in the US and 5.9% in Canada.

US - New Construction Starts in December Climb 5 Percent

New construction starts in December improved 5% to a seasonally adjusted annual rate of $425.8 billion, according to McGraw-Hill Construction, a division of The
McGraw-Hill Companies.

While nonresidential building and housing were essentially steady with the prior month, the nonbuilding construction sector (public works and electric utilities) strengthened in December, providing the lift to total construction. For the full year 2009, total construction starts plunged 26% to $411.6 billion, marking the third straight year of diminished contracting after declines of 7% in 2007 and 13% in 2008.

On a positive note, residential building continued the gradual upward trend that has been present since April 2009.

“The construction industry went through a particularly tough year in 2009, as the 26% annual decline for construction starts was the steepest in at least the past forty years,” stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “At the same time, the bottom for construction starts was reached in February, to be followed by an up-and-down pattern during 2009 which suggests that the transition has been made from steady decline to at least low-level
stability. Single family housing, while still remaining at a very low volume, began to show some improvement as 2009 progressed. Funding from the federal stimulus bill helped to produce gains for highways and bridges, as well as a pickup for a few project types such as courthouses. Going into 2010, more improvement is expected for housing and public works."

Nonresidential building overall remained unchanged from November. Gains by stores(52%) and warehouses(15%) were offset by slides in hotels(32%) and offices(15%). The manufacturing plant category showed the biggest improvement with 143% from November. Educational buildings were slightly down by 3%, and public buildings down 60% from an elevated November.

DECEMBER 2009 CONSTRUCTION STARTS
Prepared by McGraw-Hill Construction Research & Analytics

Canadian housing starts up 5.9 per cent in December

Canada Mortgage and Housing Corp. announced that the number of seasonally adjusted housing starts in December 2009 was up 5.9 per cent from November, to 174,500 units. It was considerably better than the forecasted expectation of 160,000 to 165,000 units in December.

"The improvement in housing starts was broad based in December," said CMHC chief economist Bob Dugan. "Solid increases occurred in both single and multiple starts to end the year."

Urban starts were up 6.6 per cent to 157,100 units in December. Multiple-unit starts totalled 77,700 during the month, up from 72,800 units in November, while single-unit starts totalled 79,400, up 6.4 per cent from the previous month.

December’s seasonally adjusted annual rate of urban starts increased by 17.8 per cent in Quebec, 15 per cent in Atlantic Canada, 8.7 per cent in British Columbia and 2.9 per cent in Ontario. In the Prairies, urban starts declined 3.8 per cent.

Rural starts were unchanged at 17,400 units.