February construction unchanged from previous month

New construction starts in February were about the same as January’s amount, according to McGraw Hill Construction, a division of McGraw Hill Financial.

After a strong finish to last year, the construction start statistics have shown lackluster activity during the first two months of 2014. The flat pace for total construction starts in February was due to a mixed performance by major sector – less nonresidential building, but more housing and public works. For the first two months of 2014, total construction starts on an unadjusted basis were reported at $66.7 billion – down 3 percent from the same period a year ago.

February’s data kept the Dodge Index at 103. That’s below the full-year 2013 average for the index at 111.

“While construction activity has generally trended upward over the past two years, the monthly pattern has frequently been hesitant, and early 2014 has turned out to be one of those hesitant periods,” says Robert Murray, chief economist for McGraw Hill Construction. “To some extent, the harsh winter weather has played a role in dampening construction activity, particularly as it relates to single-family housing. At the same time, multifamily housing in early 2014 has been able to strengthen further.”

For nonresidential building, the upturn so far has been more gradual and subject to setback, McGraw Hill says, such as what took place in this year’s first two months. Still, the commercial building sector is seeing rising occupancies and rents, and the improved fiscal health of states and more financing from bond measures should help the institutional building sector stabilize.

According to McGraw Hill, this would enable nonresidential building to soon regain upward momentum. For nonbuilding construction, the prospects for renewed growth in 2014 are more limited, given the comparison to 2013, which included the start of several massive public works projects, in combination with the continued retrenchment for new electric utility starts underway after the record high reached back in 2012.