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BUSINESS NEWS

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NEW CONSTRUCTION STARTS IN FEBRUARY CLIMB 10 PERCENT At a seasonally adjusted annual rate of $667.6 billion, new construction starts in February advanced 10 percent compared to the previous month, according to Dodge Data & Analytics. Much of the lift in February came from the nonbuilding construction sector, as its electric power and gas plant category included a $3 billion segment of a liquefied natural gas export terminal in Texas as well as the start of six power plant projects valued each in excess of $200 million. Nonresidential building also helped out in February with a moderate gain, resuming its hesitant upward track after the lackluster activity reported at the outset of 2016. However, residential building settled back in February following its improved January performance. For the first two months of 2016, total construction starts on an unadjusted basis were $87.1 billion, down 16 percent from the same period a year ago which featured the start of several massive LNG terminal projects. If the volatile electric power and gas plant category is excluded, total construction starts on a seasonally adjusted basis in February would be down 1 percent from January, while the year-to-date comparison on an unadjusted basis would show a 6 percent decline. The February statistics produced a reading of 141 for the Dodge Index (2000=100), compared to 129 for January. For 2015 as a whole, the Dodge Index averaged 138. “The month-to-month pattern of construction starts will often reflect the presence of unusually large projects, and this explains February’s gain relative to January,” stated Robert A. Murray, chief economist for Dodge Data & Analytics. “It also helps to explain the elevated and unsustainable pace of total construction starts during the early months of

2015, and by comparison the substantial year- to-date declines for nonbuilding construction and nonresidential building so far in 2016. “During the first two months of 2015, there were 13 projects valued at $500 million or more that reached the construction start stage, compared to five such projects during the first two months of 2016,” Murray stated. “On balance, the current economic environment is still favorable for the continued expansion of construction activity, which may not show up in the year-to-date statistics for total construction starts until the second half of this year. Interest rates continue to be low, more construction- related bond measures have been passed at the state and local government level, and the new multiyear federal transportation bill is in place. While there are signs that banks are beginning to tighten standards on commercial real estate loans, at the urging of federal bank regulators, market fundamentals such as occupancies and rents remain generally supportive of new construction.”

1200 North College Ave. Fayetteville, AR 72703 Mark Zweig | Publisher mzweig@zweiggroup.com Richard Massey | Managing Editor rmassey@zweiggroup.com Christina Zweig | Contributing Editor christinaz@zweiggroup.com Sara Parkman | Editor and Designer sparkman@zweiggroup.com Megan Halbert | Design Assistant mhalbert@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com Tel: 800-466-6275 Fax: 800-842-1560 Email: info@zweiggroup.com Online: www.thezweigletter.com Twitter: twitter.com/zweigletter Blog: blog.zweiggroup.com

MARK ZWEIG, from page 1

smile or lower price but it takes a long time to build a relationship with a subconsultant or supplier. Don’t cast those aside quickly – especially for those you know have good in- tentions. 9)Do as I do, not as I say, is always best if you’re the boss. Set a good example. Don’t be above any job. Demonstrate your competence in the basic work to be done. Pitch in and help out. 10) Don’t create your own trap. It’s good to be good at doing stuff but not if you are so good that no one else can come close to meeting your standard. You’ll never get away from anything if that’s the way you operate. Trust the other guy to perform. 11) There’s some truth to every rumor. Where there’s smoke, there’s fire. Investigate and find out what is really going on with your clients, subs, and employees, because it could affect you. 12) Take care of your people. They aren’t easily replaced. Loyalty and care for the business should be rewarded. MARK ZWEIG is Zweig Group’s founder and CEO. Contact him at mzweig@zweiggroup.com.

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THE ZWEIG LETTER April 18, 2016, ISSUE 1148

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