Construction starts up 3 percent in May

By |  June 19, 2015

May2015_constructionAccording to Dodge Data & Analytics, new construction starts in May rose 3 percent to a seasonally adjusted annual rate of $729.7 billion and a Dodge Index of 154. The rise mainly can be attributed to a liquefied natural gas export terminal project in the electric power and gas plant category of the nonbuilding construction sector.

Nonbuilding construction in May rose 59 percent to $262.7 billion, with the electric power and gas plant category jumping 229 percent. The public works category fell 3 percent, highway and bridge construction slipped 1 percent, and the miscellaneous public works category dropped 38 percent in May. Despite these decreases, the environmental public works category improved, with water supply construction rising 28 percent, river and harbor development advancing 26 percent, and sewer construction increasing 23 percent.

Residential building rose 2 percent in May to $258.9 billion, reports Dodge Data & Analytics. In this sector, multifamily housing rose 7 percent and single-family housing remained unchanged from its April pace. The month of May featured the start of eight multifamily projects valued at over $100 million.

Finally, nonresidential building fell 28 percent in May to $208.1 billion. Compared to the month of April, the manufacturing building category fell 94 percent. However, the commercial categories as a group increased 16 percent in May, with warehouse construction rising 95 percent, hotel construction climbing 90 percent and store construction improving 7 percent. Office construction fell 30 percent.

The institutional building categories as a group increased by 10 percent in May. Educational facilities grew 8 percent, the healthcare facilities category rose 34 percent and the public buildings category increased 33 percent. Despite the improvements, the amusement category retreated 4 percent, church construction fell 6 percent and transportation terminal work decreased 25 percent.

“The presence of unusually large projects, notably several LNG terminals and several petrochemical plants, continues to lift the volume of total construction starts above its underlying trend,” says Robert Murray, chief economist for Dodge Data & Analytics. “This lift from unusually large projects is expected to become less pronounced as 2015 proceeds, which still leaves total construction starts growing at about a 10 percent clip.”

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