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Construction starts slip in April as housing cools

By |  May 24, 2021

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Total construction starts fell 2 percent in April to a seasonally adjusted annual rate of $853.5 billion, according to Dodge Data & Analytics.

Single-family construction posted a sizable decline following months of strong activity while nonresidential building and nonbuilding starts both gained, Dodge Data says.

“The pullback in single-family construction starts was inevitable after showing exceptional strength over the past year,” says Richard Branch, chief economist for Dodge Data & Analytics. “Higher material prices, supply shortages and a dearth of skilled construction labor were bound to catch up with housing and will ultimately limit the ability of this sector to show the same rate of expansion this year as it did last. Meanwhile, nonresidential starts are stabilizing and should continue to heal throughout 2021. However, this sector will also be challenged by similar issues facing the housing market that will cause its starts to be below pre-pandemic levels for months to come.”

Nonbuilding construction

Nonbuilding construction starts rose 2 percent in April to a seasonally adjusted annual rate of $189.5 billion. The utility and gas plant category rose 5 percent, while environmental public works and highways and bridges gained 2 percent and 1 percent, respectively. The miscellaneous nonbuilding category dropped 3 percent in April.

On a year-to-date basis, total nonbuilding starts were 6 percent higher than during the first four months of 2020. Starts in the environmental public works category were 37 percent higher, while miscellaneous nonbuilding starts were up 25 percent, and utility and gas plant starts were 3 percent higher. Highway and bridge starts were down 11 percent.

For the 12 months ending April 2021, total nonbuilding starts were 9 percent lower than the 12 months ending April 2020. Environmental public works starts were up 14 percent, while highway and bridge starts were up 1 percent. Utility and gas plant starts were down 34 percent for the 12 months ending April 2021, and miscellaneous nonbuilding starts were down 15 percent.

The largest nonbuilding projects to break ground in April were the $625 million Atkina Solar Power in Wharton County, Texas, the $530 million New York Energy Solution Transmission Project in Claverack, New York, and the $357 million North City Pure Water Facility in San Diego.

Nonresidential building

Nonresidential building starts rose 16 percent in April to a seasonally adjusted annual rate of $276.3 billion.

Institutional building starts rose 19 percent, driven by education, transportation, and recreation buildings, Dodge says, while commercial starts rose 12 percent due to gains in the office and warehouse categories. Manufacturing starts also increased in April, climbing 25 percent. On a year-to-date basis, nonresidential building starts were 17 percent lower than during the first four months of 2020. Commercial starts were down 20 percent while institutional starts were down 18 percent. Through the first four months of 2021, manufacturing starts were up 13 percent.

For the 12 months ending April 2021, nonresidential building starts were 26 percent lower than the 12 months ending April 2020. Commercial starts were down 27 percent, while institutional starts were 18 percent lower. Manufacturing starts were down 53 percent for the 12 months ending April 2021.

The largest nonresidential building projects to break ground in April were a $1.2 billion conversion of a storage building to an office project in New York City, the $530 million Mickey Leland International Terminal in Houston, and a $325 million Amazon office project in Bellevue, Washington.

Residential building

Residential building starts fell 12 percent in April to a seasonally adjusted annual rate of $387.8 billion. Single-family starts fell 18 percent while multifamily starts rose 5 percent. On a year-to-date basis, total residential starts were 24 percent higher. Single-family starts were up 31 percent, while multifamily starts were 6 percent higher.

For the 12 months ending April 2021, total residential starts were 12 percent higher than the 12 months ending April 2020. Single-family starts gained 20 percent, while multifamily starts were down 8 percent on a 12-month sum basis.

The largest multifamily structures to break ground in April were the $232 million Travis Residential Tower 1 in Austin, Texas, the $173 million 241 West 28 St. mixed-use project in New York City, and the $165 million Union Square Tower in Somerville, Massachusetts.

Regionally, April’s starts rose in the Northeast and Midwest but fell in the West, South Central and South Atlantic regions.

Carly McFadden

About the Author:

Carly McFadden is the associate editor at Pit & Quarry. She can be reached at 216-363-7930 or cmcfadden@northcoastmedia.net.

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