May construction rates total $556.1 billion.

NEW YORK - New construction starts for May were at a seasonally adjusted annual rate of $556.1 billion, up 1 percent compared to the previous month, according to figures released by McGraw-Hill Construction.

Nonresidential building registered its strongest performance so far in 2004, outweighing a modest retreat for housing and a more substantial decline for "nonbuilding" construction, such as public works and electric utilities.

"The construction industry has picked up the pace in recent months," said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "Single-family housing continues to be very strong, and now nonresidential building is beginning to see more sustained improvement, marking a change from its weakening trend over the past three years."

Nonresidential building jumped 11 percent in May to $164.7 billion. School construction edged up 3 percent, while health care facilities and public buildings reported gains of 15 percent. Transportation terminal work increased 19 percent.

McGraw-Hill also reported that residential building, at $312.7 billion, settled back 1 percent in May. Single-family housing was down 4 percent in dollar volume, although the amount was still 10 percent above the average pace in 2003. Multifamily housing grew 14 percent.

Nonbuilding construction dropped by 9 percent to $78.6 billion. According to McGraw-Hill, much of the nonbuilding retreat was the result of an 88 percent plunge in electric utilities, following the strong amount of new power plants started during March and April. The public works categories registered a mixed pattern. Highways and bridges increased 12 percent after a weak April, and water-supply systems were up 4 percent. Sewers and riverfront developments showed respective declines of 5 percent and 9 percent.

During the first five months of 2004, total construction on an adjusted basis was up 10 percent relative to the same period in 2003. Residential building led with a 21 percent gain. Nonresidential building in the January-May period was down 2 percent from a year ago, while nonbuilding construction was down 5 percent.