July Headlines

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* Construction Starts - June Construction Slips 1%

* Monthly Feature - Florida Construction Suffers Under Housing Bust

* Hot Economic News - Employment, Federal Funds Rate, Retail Sales, AIA Work on the Boards Index, Hotel Occupancy Rates, Residential Remodeling Spending

Monthly Construction Start Statistics:

June Construction Slips 1%

New construction starts in June retreated 1% to $552.0 billion (annual rate), as a pullback for nonresidential building outweighed gains for the residential and nonbuilding sectors. Nonresidential building fell 12% after its elevated May pace, which had been lifted by the start of a $3.8 billion oil refinery expansion in Indiana. While June included another large refinery project – a $1.9 billion refinery expansion in Michigan – manufacturing plant construction for the month was down 43%. Healthcare construction in June dropped 33%, following strong activity earlier in the spring. June witnessed gains for these major categories: hotels, up 35%; educational buildings, up 8%; and offices, up 4%. Residential building in June grew 2%, the result of an 11% improvement for multifamily housing combined with a 1% decline for single family housing. Nonbuilding construction in June jumped 19%, reflecting greater contracting for power plants, natural gas pipelines, and sewers.

For the first six months of 2008, total construction starts were reported at $282.1 billion, down 16% from a year ago. Residential building year-to-date plunged 39%, with single family down 38% and multifamily down 41%. Nonbuilding construction in the January-June period slipped 3%, with declines for sewers, down 9%; and highways and bridges, down 10%. Nonresidential building grew 6% in the first six months of 2008, lifted especially by a 132% surge for manufacturing plants that reflected several large refinery expansions. Also showing year-to-date growth was hotel construction, up 37%; healthcare facilities, up 4%; and educational buildings, up 2%; while offices held steady. Steep declines were reported for stores, down 25%; and warehouses, down 32%.

For more information, call (800) 591-4462, or read here for the monthly press release on construction start statistics.

Florida Construction Suffers Under Housing Bust

Just a few short years ago, Florida was the primary benefactor of an unprecedented housing boom. As residential construction and housing prices reached new highs, state coffers flourished, population soared and employment rose dramatically. But housing peaked in 2005, and the severe housing downturn that began in 2006 continues to seriously trouble the state's economy.

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Economic Indicators

Employment:
The economy lost 62,000 nonagricultural jobs in June, bringing the total number of jobs lost to 438,000 in the first six months of the year (an average of 73,000 per month).

Federal Funds Rate:
At its June 24-25 meeting, the Federal Reserve chose to leave interest rates unchanged at 2%, a move that ended a nine-month campaign of rate cuts.

Retail Sales:
Total retail sales rose 0.1% in June, following a downwardly revised 0.8% gain in May.

Construction Indicators

AIA Work on the Boards Index:
According to the American Institute of Architects, architectural billings slowed for the fourth straight month in May. Combined with a decline in inquiries, this suggests a continued slowdown over the next several months.

Hotel Occupancy Rates:
Trends in the lodging industry have been wildly positive over the past several years, but this year's economic slowdown may finally bring a retrenchment for hotels.

Residential Remodeling Spending:
Expenditures for improvements and repairs of residential properties declined 1% in 2007 to $226.4 billion. This will, unfortunately, be the last report on residential remodeling from the U.S. Census Bureau as budget cuts will prevent further reporting of this information.

For more information, call (800) 591-4462.

View Full Story here.