New Building Pacts Drop 5% in November

Contracts for new construction projects dropped 5% in November, ending a four-month string of increasing building activity, according to the F. W. Dodge division of McGraw-Hill Information Systems.

The business information company reported that new construction contracts fell to an annualized rate of $225.8 billion during November. The annualized rate for October was $238.1 billion.

But overall, growth of construction contracts remained ahead of 1984, with $211.7 billion worth of new contracts awarded in the first 11 months of 1985, compared to $197.1 billion during the same period last year.

New contracts are considered an indicator of future spending in the nation’s construction industry, the survey stated.

George A. Christie, chief economist for F. W. Dodge, said that, compared to the last few months, the November contract rate was more consistent with current construction markets and was in line with projections for 1986.

Non-residential building contracts fell to an annual rate of $78.7 billion in November from the record $88-billion pace set in September and October, F. W. Dodge reported.

The decline included an 18% drop in office construction contracts. Christie said the slowdown of federal tax reform proposals may have made many developers feel less need to quickly begin projects under current tax laws they believed were more favorable to them.

Residential building contracts fell 4% to $105.6 billion, despite lower mortgage rates.