June construction starts retreat 15 percent

New construction starts in June dropped 15 percent from the previous month to a seasonally adjusted annual rate of $620.2 billion, according to Dodge Data & Analytics.

The decline followed an especially strong May, the company says. Nonbuilding construction in June fell sharply as the result of a steep pullback by Dodge Data & Analytics’ electric utility and gas plant category, while nonresidential building experienced a less severe loss of momentum.

Residential building in June was able to post a slight gain, helped by the continued strength for multifamily housing.

During the first six months of 2015, total construction starts on an unadjusted basis were reported at $336 billion, up 23 percent from the same period a year ago.

June’s data lowered the Dodge Index to 131. The index was at 154 in May. The Dodge Index averaged 144 through the first six months of 2015, helped by especially strong readings in February, April and May.

“Notwithstanding the up-and-down pattern that’s been present on a monthly basis during the first half of 2015, the construction start statistics show that the expansion continues, with a few nuances,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “The 23 percent year-to-date increase for total construction overstates the strength of the expansion, and the underlying rate of growth is likely around 10 percent.

“On the plus side, Congress has moved closer in July to taking the needed steps to shore up the depleted Highway Trust Fund,” Murray continues.