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Dodge Data: Construction starts down in January 2021

By |  February 17, 2021

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Total construction starts were down 4 percent in January, compared to the previous month, to a seasonally adjusted annual rate of $794.3 billion, according to Dodge Data & Analytics.

By segment, nonresidential building starts were flat in January, nonbuilding starts retreated 10 percent and residential starts were down 4 percent.

By region, construction starts were down in three of five U.S. regions (Midwest, South Atlantic, South Central) while rising in two (Northeast, West).

“The tenuous beginning to construction starts in 2021 highlights the long and rocky road ahead for the sector this year,” says Richard Branch, chief economist at Dodge Data. “Over the course of the year, the economy will recover as more Americans receive their vaccinations. However, the construction sector’s recovery will take time to materialize due to the deep scars caused to the industry by the pandemic. Patience will be key in the months to come.”

Nonbuilding construction

The nonbuilding construction sector declined 10 percent in January to a seasonally adjusted annual rate of $168.4 billion, according to Dodge Data.

Every nonbuilding sector retreated over the month, led by miscellaneous nonbuilding starts (down 17 percent), utility/gas (13 percent), highways and bridges (7 percent), and environmental public works (6 percent).

The largest nonbuilding projects to break ground in January were the $825 million Desert Quartzite solar facility in Blythe, California, and the $427 million Mesquite Sky wind farm in Putnam, Texas.

For the 12-month period ending this January, total nonbuilding starts declined 15 percent compared to the previous 12 months ending January 2020, Dodge Data says.

Nonresidential construction

The nonresidential construction sector remained flat in January at a seasonally adjusted annual rate of $224.5 billion.

Commercial starts were up 1 percent, largely due to a sizable gain in warehouse construction, while institutional building starts were down 9 percent – most noticeably in education and health care construction. Meanwhile, manufacturing starts skyrocketed 81 percent due to the start of two large projects.

The largest nonresidential building projects to break ground in January was the $850 million Nucor steel mill in Brandenburg, Kentucky, and the $470 million Nikola Motors hydrogen-electric truck plant in Eloy, Arizona.

For the 12 months ending in January, nonresidential building starts dropped 25 percent. Manufacturing starts tumbled by 59 percent, commercial starts were down 27 percent and institutional starts were down 15 percent.

Residential building

Construction starts for residential building dropped 4 percent in January to a seasonally adjusted annual rate of $401.4 billion.

Multifamily housing starts were down 7 percent, while single-family housing starts slumped 3 percent.

The largest multifamily project to break ground in January was the $200 million DOT Block Residences in Dorchester, Massachussetts, and the $153 million Halley Rise Block D-1 mixed-use building in Reston, Virginia.

For the 12 months ending in January, total residential constructions starts improved 5 percent. Over that same period, single-family construction starts jumped 12 percent while multifamily declined 12 percent.

Kevin Yanik

About the Author:

Kevin Yanik is the editor-in-chief of Pit & Quarry magazine. Yanik can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

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