The value of new construction starts in July advanced 7% to a seasonally adjusted annual rate of $411.2 billion, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies.  Nonresidential building continued to see improvement after extremely depressed activity earlier in the year, and nonbuilding construction bounced back following its June slide.  Both sectors in July were lifted by the start of several massive projects.  Meanwhile, residential building lost momentum in July, as the housing recovery paused for an additional month.  For the January-July period of 2010, total construction starts on an unadjusted basis came in at $238.0 billion, down 4% compared to a year ago.

The July statistics produced a reading of 87 for the Dodge Index (2000=100), up from a revised 81 for June.  “The pace of contracting over the past year has essentially stabilized at a low level, and July showed activity moving back up towards the middle of its recent range, following June’s weak performance,” stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction.  “Nonresidential building seems to be leveling off after the substantial declines witnessed over the past year, and in a few cases projects that were deferred are now reaching groundbreaking.  Still, given the negatives of tight bank lending, sluggish employment, and the diminished fiscal position of states and localities, a sustained recovery for nonresidential building remains several quarters away, at least.  The public works sector continues to show generally healthy activity, supported by financing from ongoing federal programs as well as stimulus funds.  The housing sector right now is in the midst of a pause from the earlier improvement shown during the latter half of 2009 through the first quarter of 2010.  In effect, the volume of total construction starts appears to be in the process of ‘turning the corner,’ after the steep decline reported in 2009, but the turn is assuming an extended U-shaped pattern.”

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