Construction starts post solid gain in August 2020

By |  September 18, 2020
Chart: Dodge Data & Analytics

Gains were seen in all three major building sectors for August 2020. Click to enlarge. Chart: Dodge Data & Analytics

Total construction starts rose 19 percent in August to a seasonally-adjusted annual rate of $793.3 billion, according to Dodge Data & Analytics.

Gains were seen in all three major building sectors: nonbuilding construction jumped 40 percent over the month, nonresidential building starts rose 16 percent and residential building climbed 12 percent.

While large projects certainly influenced the August gains, removing those projects would still have resulted in a gain for the month, Dodge says.

Year-to-date through the first eight months of the year, construction starts were 14 percent lower than the same period in 2019. By segment, nonresidential starts were 24 percent lower and nonbuilding starts were down 20 percent, but residential starts were down less than one percent.

For the 12 months ending in August, total construction starts declined 6 percent from the 12 months starting August 2019. Nonresidential building starts fell 13 percent, and nonbuilding starts were 9 percent lower in the 12 months ending August 2020, while residential building starts rose 3 percent.

In August, the Dodge Index rose 19 percent to 168 from the 141 reading in June. The Dodge Index was down 8 percent compared to a year earlier and 6 percent lower than its pre-pandemic level in February.

Nonbuilding construction

Nonbuilding construction posted a 40-percent gain in August to a seasonally-adjusted annual rate of $184.4 billion, nearly reversing the sizable decline in the previous month as two large projects pushed activity higher, Dodge says.

Starts in the utility/gas plant more than doubled, while environmental public works posted an 89 percent gain and highway and bridge starts moved up 13 percent. Miscellaneous nonbuilding starts lost 5 percent.

The largest nonbuilding project to break ground in August was the $1.3 billion Wastewater Control Plant in San Francisco. Also starting during the month were the $888 million Dania Beach Clean Energy Center in Dania Beach, Florida, and the $310 million Aztec Stadium at San Diego State University in San Diego.

Nonresidential building

Nonresidential building starts in August were also aided by large projects in the office and manufacturing sectors, leading to an increase of 16 percent to $236.7 million. Removing these projects, however, would not have prevented an increase in nonresidential building starts, Dodge says. Commercial starts rose 36 percent and manufacturing starts rose 201 percent. Institutional starts, however, fell 7 percent.

The largest nonresidential building project started in August was the $1.0 billion Facebook Data Center (Project Woolhawk) in Gallatin, Tennessee. Also starting during the month was the $740 million Texas Instruments Fabrication Plant in Richardson, Texas, and a $700 million mixed-use office and hotel project in Boston.

Residential building

Residential building starts moved 12 percent higher over the month in August to a seasonally-adjusted annual rate of $372.1 billion. Multifamily building starts increased 62 percent while single family starts fell 3 percent.

The largest multifamily structure to break ground in August was the $549 million Mana’olana Place Mixed Use in Honolulu. Also starting in August were the $500 million Pacific Park Mixed Use Development in Brooklyn, New York, and a $250 million condominium building at the Union Theological Seminary Space in New York.

Carly Bemer

About the Author:

Carly Bemer (McFadden) is a former Associate Editor for Pit & Quarry.

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