April 2017 construction starts drop 13 percent

By |  June 5, 2017

The value of new construction starts in April dropped 13 percent from March to a seasonally adjusted annual rate of $647.8 billion, reports Dodge Data & Analytics. This lowered the Dodge Momentum Index to 137, compared to 157 for March.

In April, nonbuilding construction was at $119 billion, which was down 39 percent from its March number, Dodge Data & Analytics says. The public works categories as a group fell 48 percent, which included an 83 percent drop in the miscellaneous public works category. Sewer construction fell 41 percent, and highway and bridge construction fell 10 percent. Despite this, water supply construction increased 9 percent, river and harbor development increased 10 percent, and the electric utility and gas plant category increased 71 percent.

Residential building in April fell 5 percent to $295.4 billion. Single-family housing fell 6 percent. However, April’s pace for single-family housing was still 5 percent above the average monthly pace during 2016, Dodge Data & Analytics adds. In addition, multifamily housing in April fell 3 percent.

Nonresidential building in April fell 1 percent to $233.4 billion. According to Dodge Data & Analytics, the commercial building categories as a group were up 6 percent, the commercial garage category increased 14 percent, hotel construction increased 5 percent and the manufacturing plant category increased 147 percent. In addition, stores fell 7 percent and warehouses fell 20 percent.

The institutional categories as a group fell 16 percent in April, with an 85 percent decrease in the transportation terminal category, a 10 percent decrease in public buildings and a 3 percent decrease in health care facilities. Educational facilities increased 12 percent, religious buildings increased 43 percent and amusement-related construction increased 50 percent.

According to Dodge Data & Analytics, the 4 percent downturn for total construction starts on an unadjusted basis during the January to April period of 2017 came as the result of a mixed performance by major sector. Nonbuilding construction fell 21 percent year-to-date, residential building remained unchanged year-to-date, nonresidential building increased 5 percent year-to-date and institutional building increased 23 percent year-to-date.

“The construction start pattern so far in 2017 can be characterized as three steps forward and one step back, as the often hesitant pattern of the construction expansion continues,” says Robert Murray, chief economist at Dodge Data & Analytics. “The first three months of this year drew support from a number of very large projects, most notably several massive pipeline and airport terminal projects. While April did include groundbreaking for the $1.3 billion Oceanwide Center mixed-use complex in San Francisco, comprised of two high-rise towers, the boost from very large projects in April was generally less than what occurred during the first three months of this year.”

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About the Author:

Allison Kral is the former senior digital media manager for North Coast Media (NCM). She completed her undergraduate degree at Ohio University where she received a Bachelor of Science in magazine journalism from the E.W. Scripps School of Journalism. She works across a number of digital platforms, which include creating e-newsletters, writing articles and posting across social media sites. She also creates content for NCM's Portable Plants magazine, GPS World magazine and Geospatial Solutions. Her understanding of the ever-changing digital media world allows her to quickly grasp what a target audience desires and create content that is appealing and relevant for any client across any platform.

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