Office Project Spurt Pushes New Construction Up 3%

The number of new construction contracts rose in November, with the bulk of the increase from non-residential building projects, a business-research company reported Thursday.

The F. W. Dodge Group of McGraw-Hill Information Services Co. said that new construction projects were up 3% last month over October to an annualized value of $246.7 billion. Construction contracts rose 1% in October following three straight monthly declines.

Setting the pace for the November increase was the non-residential building sector, which rose a seasonally adjusted 7% to an annualized value of $80.9 billion, the report said.

Newly started housing was up 4% to an annualized value of $126.0 billion, with continued strength in one-family houses, it said.

Non-building construction, which includes public works and utility projects, declined 9% to an annualized value of $39.8 billion, the report said.

“Although November’s contracting was helped by a rare spurt of office building, it has been the consistency of demand for single family homes that has been the main support of the construction sector throughout 1988,” said George A. Christie, a McGraw-Hill economist.

“Until the expected rise of mortgage rates materializes, home building is making the difference between a sharp decline and a gentle letdown from last year’s peak of total construction activity.”

For the first 11 months, new construction starts on an unadjusted basis totaled $233.4 billion, down 2% from the same period in 1987, the report said.

The West, with a 2% rise over last year, was the only major region to show a gain in 1988.