Dodge: Construction starts down 14 percent in November

Total construction starts fell 14 percent to a seasonally adjusted rate of $867.8 billion, according to Dodge Construction Network.

Nonbuilding and nonresidential led the losses, falling 30 and 21 percent, respectively, after seeing sharp increases in October. The residential sector continued its growth in November, albeit at a modest 3 percent clip.

Without three large projects in October, total construction starts in November would have increased by 5 percent.

“Large projects aside, the underlying trend continues to point to a modest recovery in construction starts,” says Richard Branch, chief economist for Dodge Construction Network. “However, even as projects continue to move forward, the short-term outlook remains cloudy due to continued escalation in material prices and labor shortages.”

Adds Branch: “While construction should see some reprieve in 2022, these challenges will restrain the industry’s ability to fully capitalize on both the large number of projects in planning and funding resulting from the infrastructure package. The result will be moderate growth in construction starts over the near term.”

Nonbuilding building

Nonbuilding’s 30 percent drop to a seasonally adjusted rate of $188.1 billion follows an October groundbreaking of an $8.5 billion LNG export facility. With that project removed from the data, November starts would have increased 13 percent.

November’s miscellaneous nonbuilding category jumped 70 percent and highway and bridge starts gained 11 percent. Losses came in environmental public starts (14 percent) and utilities/gas plant starts (69 percent).

Year-to-date, total nonbuilding starts were 1 percent higher than a year earlier through November. Environmental public works were 19 percent higher and utility/gas plant starts were up 15 percent.

In that same time frame, highway and bridge starts were 7 percent lower and miscellaneous nonbuilding fell 15 percent during the first 11 months of the year.

The largest nonbuilding projects to break ground in November were the $1.6 billion Vineyard Wind, an 1,800 mile wide offshore wind project in Barnstable, Massachusetts; the $337 million portion of the Foothill Gold Line light rail project in Glendora, California; and the $325 million Sonoran Solar project in Buckeye, Arizona.

Nonresidential building

Nonresidential building starts lost 21 percent in November, falling to a seasonally adjusted annual rate of $281.1 billion.

This decline is due to the start of two large manufacturing projects beginning in October. Without those two projects, nonresidential building projects would have increased 5 percent in November.

In the month, commercial building starts fell 10 percent, with out parking structures and warehouses showing small gains. Manufacturing starts also fell by a staggering 96 percent.

Institutional starts gained 28 percent, with all categories rising, while nonresidential building starts were up 11 percent in the first 11 months of 2021. Commercial starts increased 7 percent, manufacturing starts grew 86 percent and institutional starts were up 5 percent.

The largest nonresidential building projects to break ground in November were the $2.6 billion first phase of the Terminal 1 replacement at San Diego International Airport, the $840 million Robley Rex VA Medical Center in Louisville, Kentucky, and the $419 million expansion of the Wisconsin Convention Center in Milwaukee.

Residential building

Residential starts rose 3 percent in November to a seasonally adjusted rate annual rate of $398.6 billion.

Multifamily starts moved 16 percent higher, while single family starts dropped 2 percent. Through the first 11 months of the year, residential starts were up 20 percent over the same period one year ago. In that time, single family starts gained 20 percent and multi-family starts rose 23 percent.

The largest multifamily structures to break ground in November were the $300 million first phase of the High St. Atlanta mixed-use projects in Dunwoody, Georgia, the $237 million North Loop Green 3 Project in Minneapolis and the $200 million 60 Kilmarnock St. residential building in Boston.

Regionally, total construction starts improved in the northeast and Midwest, but fell in the south Atlantic, south central and west regions.