August construction starts leap forward

By |  September 22, 2016

Dodge-Data-Analytics-LogoNew construction starts in August soared 21 percent to a seasonally adjusted annual rate of $711.2 billion, according to Dodge Data & Analytics.

The August data raised the Dodge Index to 150, up from 124 in July.

According to the firm, the August rise featured an especially elevated amount for nonresidential building, which was helped by the start of a $3 billion petrochemical plant in Louisiana; the $1.7 billion Wynn Casino in the Boston area; and a $508 million terminal upgrade at Seattle-Tacoma International Airport.

The nonbuilding construction sector also experienced strong growth, with its public works segment lifted by the start of a $3 billion natural gas pipeline project in Alabama, Florida and Georgia. In addition, residential building contributed with a moderate August gain, reflecting another advance for multi-family housing. This segment included the groundbreaking for the $900 million Wanda Vista Tower in Chicago.

Through the first eight months of 2016, total construction starts on an unadjusted basis were $439.3 billion, down 7 percent from a year ago. The quarterly averages for the Dodge Index show that construction activity increased 11 percent in this year’s first quarter to 146, followed by a 10 percent decline in the second quarter to 131.

The July and August average for the Dodge Index is 137, a 4 percent gain relative to the second quarter.

“The sharp rise in August makes it likely when September data becomes available that construction starts for the third quarter will be able to register moderate growth, supporting the belief that the construction industry still has room for further expansion despite some recent deceleration,” says Robert A. Murray, chief economist for Dodge Data & Analytics.

“The presence or absence of very large projects, of course, has played a considerable role in the month-to-month pattern for construction starts,” Murray adds.  “While July did not receive much of a boost from very large projects, such a boost was clearly present in the August statistics.”

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Kevin Yanik is editor-in-chief of Pit & Quarry. He can be reached at 216-706-3724 or

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