Construction starts fall 2 percent in September

By |  October 18, 2016

The value of new construction starts in September decreased 2 percent to a seasonally adjusted annual rate of $703.7 billion and a reading of 149 for the Dodge Index, Dodge Data & Analytics reports.

Nonresidential building in September increased 5 percent to $282.3 billion, following the 43 percent increase in August. The nonresidential increase in September was led by a 148 percent jump for office construction. In addition, store construction increased 31 percent and, as a group, the commercial categories increased 37 percent. However, hotel construction retreated 30 percent, commercial garages decreased 20 percent and warehouses fell 17 percent.

The institutional side of the nonresidential building market advanced 8 percent in September, Dodge Data & Analytics reports, with much of the increase coming from healthcare facilities, which climbed 57 percent. In addition, public buildings were up 10 percent, religious buildings were up 40 percent, amusement construction starts were down 32 percent and transportation terminal work was down 8 percent.

Residential building fell 8 percent in September to $271.1 billion, with multifamily housing falling 17 percent and single-family housing falling 4 percent.

Nonbuilding construction in September dropped 2 percent to $150.3 billion. Much of this decline was caused by the miscellaneous public works category, including project types with pipelines, mass transit and site work, which experienced a 72 percent plunge. According to Dodge Data & Analytics, the environmental public works categories were mixed, with sewers down 23 percent, river/harbor development up 16 percent and water supply systems up 20 percent. Highway and bridge construction also rose 17 percent.

The 3 percent decline for total construction starts on an unadjusted basis during the first nine months of 2016 was due to a mixed pattern by major sector, Dodge Data & Analytics reports. Nonresidential building year-to-date was down 2 percent, residential building was up 5 percent and nonbuilding construction fell 14 percent.

“Whether looking at construction starts month-to-month or quarter-to-quarter, the past two years have shown considerable volatility, reflecting in part when very large projects were entered as construction starts,” says Robert Murray, chief economist for Dodge Data & Analytics. “When combined with the more broad-based strengthening for construction that’s taken place in this year’s August and September, and with the comparison to the subdued activity for the same two months a year ago, the year-to-date shortfall for total construction starts has become considerably smaller than what was reported earlier in the 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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