Hitting the highway.

The highway and bridge construction segments were among the biggest gainers in what was a moderate construction growth period this spring.

The value of new construction projects in April of 2006 witnessed an overall 4 percent increase versus April of 2005, according to the McGraw-Hill Construction division of The McGraw-Hill Cos., Lexington, Mass.

Moderate gains were reported for nonresidential building, with residential building also showing modest growth.

Through the first four months of 2006, total construction spending on an unadjusted basis came in at $210.5 billion, up 8 percent relative to last year's January-April period.

"The current year is seeing a shift in the source of expansion for construction activity," notes McGrawHill Construction vice president of economic affairs Robert A. Murray. "Single-family housing had been providing the upward push for much of the past five years, but now it's beginning to lose momentum. Nonresidential building in 2006 has picked up the slack, as stronger fundamentals such as improved occupancies and rents are outweighing any dampening arising from higher materials costs. In addition, the public works sector is being boosted by enhanced transportation funding, and the volume of new power plant construction appears to be turning upward after a lengthy decline."

Infrastructure construction advanced 9 percent in April. Sharp gains were reported for highways, up 17 percent; and bridges, up 46 percent, helped by the multi-year federal transportation bill now in place, and greater federal and state funding, according to Murray.

The environmental and utility categories had a mixed performance in April. While water supply projects were up 5 percent, sewer construction dropped 20 percent and river/harbor development fell 26 percent. The electric utility category had a very strong April, climbing 175 percent relative to a lackluster March. Two large power plant projects, one in Alabama and one in Nevada, reached the construction start stage in April.

Nonresidential building in April grew 5 percent compared to last year. On the commercial/industrial side, store construction continued at a very healthy pace, rising 14 percent for the month, and it was joined by a 28 percent increase for warehouses.

Another healthy performer in April was health care facilities, contracts for which jumped 46 percent from a subdued March. Strong growth in April was also shown by public buildings (such as courthouses and prisons), up 52 percent, while school construction in April eased back 2 percent, although the level of new starts for this structure type was still 4 percent above the average rate for all of 2005.

Residential building in April edged up a mere 2 percent, with single-family housing being essentially flat. Since the third quarter of 2005, single-family housing has seen a gradual loss of momentum. With homes taking longer to sell, the inventory of new homes for sale has been rising, contributing to a modest slowdown for construction.

While single-family housing was unchanged in April, the multi-family side of the housing market climbed 13 percent. April included the start of 18 condominium/apartment projects valued at $50 million or greater, with eight of these projects located in Florida.

In terms of geography and across all sectors, total construction spending for April-May 2006 versus the same period last year looks this way: the West, up 13 percent; the South Central, up 8 percent; the Northeast, up 6 percent; and the Midwest and South Atlantic, each up 5 percent.

U.S. CONSTRUCTION CONTRACT VALUES

* in billions

                         Jan-Apr 2006   Jan-Apr 2005  % Change

Residential                 $120.8*        $115.0*       +5%
Non-Residential Const.       $55.8*          48.8*       +14%
Infrastructure               $33.9*          31.3*       +8%
Total                       $210.5*        $195.1*       +8%

Source: McGraw-Hill Construction

Note: Table made from line graph.