Even Steven.

A fairly healthy December construction climate resulted in an overall construction spending figure for 2006 that was nearly identical to the 2005 dollar amount.

According to McGraw-Hill Construction, Lexington, Mass., total spending in 2006 came in at $663 billion, essentially the same dollar amount as 2005. The flatness marked a change from the double-digit growth of 2004 and 2005, when the value of new construction starts climbed 11 percent and 12 percent, respectively.

Within that flat overall spending pattern, however, there were dramatic differences in the trends of the three major building sectors.

While residential construction spending dropped by 12 percent in 2006, the non-residential sector moved up by 14 percent and infrastructure spending jumped by 19 percent.

In December, new construction starts increased 2 percent compared to the month before. Residential building edged upward, and greater activity was also reported in the infrastructure sector. However, non-residential building in December settled back from its recent strength.

Looking back on 2006 overall, from the spring of 2006 through late fall, a sharp downturn for single family housing was outweighed gains by non-residential building and public works. But at the close of 2006, single family housing began to stabilize, making it possible for total construction to register a slight increase after its extended decline.

"The 2006 pattern for total construction was shaped by the single family downturn, a notable change compared to the lift that single family housing provided during the first half of this decade," remarks Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "Last year also featured growth for such nonresidential structure types as hotels, offices, and schools, combined with a brisk pace for the public works sector. That increased amount of construction was supported by positive market fundamentals, such as declining vacancies and rising rents, along with greater funding coming from the federal and state governments."

Venturing a forecast for this year, Murray says, "For 2007, it appears that the worst of the single family slide is over, but the climate for nonresidential building and public works may not be quite as favorable as last year."

As 2006 came to a close, nonresidential spending fell 4 percent. Office construction dropped 45 percent from a November that included $1.6 billion related to the estimated cost of the Freedom Tower in lower Manhattan.

For 2006 as a whole, nonresidential building advanced 14 percent to $204 billion, a faster rate of growth than what took place in 2005 (up 9 percent) and 2004 (up 5 percent). Hotel construction in 2006 soared 89 percent, boosted by groundbreaking for a number of very large hotel/casino projects in Las Vegas, Atlantic City, and other sites. Office construction climbed 37 percent, regaining upward momentum after stalling in 2005.

The top five markets for office construction in 2006, ranked by the dollar amount of new construction starts, were: New York, Washington, Phoenix, Chicago, and Dallas-Ft. Worth. Store construction in 2006 edged up 1 percent, essentially maintaining the heightened volume achieved the previous year, while warehouse projects slipped 7 percent. The manufacturing plant category registered a 22 percent gain in dollar terms, aided by a surge of ethanol plant construction projects across the nation.

U.S CONSTRUCTION CONTRACT VALUES

                         Jan-Dec 2006   Jan-Dec 2005   % Change

Residential              $337.8 *       $382.1 *       -9%
Non-Residential Const.   $203.8 *       $179.4 *       +12%
Infrastructure           $121.4 *       $102.0 *       +17%
Total                    $663.0 *       $663.5 *       +0%

* in billions

Source: McGraw-Hill Construction

Note: Table made from bar graph.