New York sees 2% rise in construction activities this year

Contracting for new construction early this year in US has increased 2% to a seasonally adjusted annual rate of $491.4 billion. Nonresidential building rebounded after a weak December, while residential building continued at a brisk pace. In contrast, the nonbuilding construction sector lost momentum, reflecting a sharp decline for electric power plants.

The construction industry has proved to be one of the healthier sectors of the economy during 2001, and the slight gain in January suggests that construction remains resilient. Single family housing and school construction were the industry mainstays during 2001, offsetting weakness for commercial building, and the first month of 2002 shows a continuation of that trend.

Strong gains were reported for healthcare facilities, up 21%; churches, up 37%; and transportation terminals, up 46%. Moving in the opposite direction were amusement-related projects, down 17%; and public buildings (courthouses and detention facilities), down 18%.

The commercial side of the nonresidential market was generally weaker in US in the beginning of the year. Warehouses dropped by 17%, while offices and hotels showed respective declines of 7% and 2%. Stores and shopping centers, up 18%, ran counter to the downward trend for the other commercial building types.

The industry analysts observe that the weak economy and more restrictive bank lending have adversely affected commercial building, the pullback for store construction has been comparatively mild, given continued expansion by the stronger players in the retail sector. Manufacturing plant construction witnessed further weakening, sliding an additional 27%.

Halliburton restructures into separate construction units

Energy-services giant Halliburton Co. is expecting layoffs since it is breaking into two independent subsidiaries by this midyear, with one focussed on oil and gas, the other on construction and engineering.

These changes are designed to make it easier for investors to understand the company’s business. This also will stop the slide in Halliburton stock because of asbestos liability. Though it will be difficult to split the company initially, the company sources say that impact on business operations will be minimal. The company will eliminate an administrative bureaucracy that served both the energy and construction businesses.

Though there will be job losses, the vast majority of the parent company’s 85,000-strong work force will remain unaffected. The top officials are expecting Halliburton’s fortunes to improve with a stronger economy later this year.

As for the shifting the engineering and construction business into a wholly owned subsidiary, the company is sure that this would mean less dependence on parent company for financial support. The top officials of the construction unit are of the opinion that they would be in better position over the long term as purely a construction company, to be called KBR.

Artist’s impression of London Bridge Tower released

An artist’s impression of the new London Bridge Tower has been recently published in London. At 1016ft, London Bridge Tower will provide 850,000 sq ft of commercial, leisure and residential space on 66 floors.

The building has been designed by Italian architect Renzo Plano and will be managed by the Sellar Property Group. The tower will include offices, apartments, a hotel, shops and restaurants. It is to be built on the site of Southwark Towers, the 1970s office block once occupied by PricewaterhouseCoopers. It is expected to be operational by 2005.

Shaw Group on the expansion drive

The Shaw Group, which acquired Stone & Webster last year and became a major player in the powerplant construction market, has entered new markets recently by announcing a plan to acquire the assets of troubled IT Group. By paying $105 million and assuming liabilities, Baton Rouge-based Shaw acquires.

IT’s environmental clean-up and military housing construction contracts at a time when powerplants are being cancelled in large numbers due to fall-off in demand and an uncertain business outlook. As part of the deal, certain subsidiaries of IT, which is based in Pittsburgh, Pa., filed voluntary bankruptcy petitions. This acquisition, if approved by the Bankruptcy court, will continue the Company’s strategy of growth and diversification.