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Dodge Data: Construction starts slip slightly in July 2021

By |  August 18, 2021

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Total construction starts fell 3 percent in July to a seasonally adjusted annual rate of $854.8 billion, according to Dodge Data & Analytics.

There were a few bright spots in July, Dodge Data says, with all three sectors – residential, nonresidential building and nonbuilding – moving lower during the month.

“Construction material prices continue their march higher and are weighing heavily on construction starts,” says Richard Branch, chief economist at Dodge Data. “Lumber and copper prices have fallen in recent weeks. However, steel, plastic and other construction-related products are continuing their ascent. These increases will continue to impact construction starts over the coming months, somewhat muting the impact of stronger economic activity.

“A further risk to the sector is the rising number of COVID-19 cases due to the Delta variant,” Branch adds. “While we don’t expect significant business restrictions in response, it is a risk that cannot be fully discounted. On the upside, projects entering the planning stage remain at levels not seen in several years and forward progress on an infrastructure program and the federal budget provides hope that brighter days are ahead.”

Nonbuilding construction

Nonbuilding construction starts fell 1 percent in July to a seasonally adjusted annual rate of $171 billion.

Starts in the environmental public works category dropped 25 percent following a large gain in June. Meanwhile, highway and bridge starts advanced in July, increasing 11 percent, and utility/gas plant starts rose 25 percent. Miscellaneous nonbuilding starts were flat.

On a year-to-date basis, total nonbuilding starts were 2 percent higher through July. Environmental public works starts were up 35 percent, and utility/gas plant starts rose 5 percent. Highway and bridge starts and miscellaneous nonbuilding starts were both lower on a year-to-date basis, losing 4 percent and 19 percent, respectively.

Nonresidential building

Nonresidential building starts fell 1 percent in July to a seasonally adjusted annual rate of $283.8 billion.

Commercial starts lost 19 percent during the month, as starts pulled back in the warehouse, office and retail sectors, while hotel starts rose. Institutional starts rose 11 percent during the month due to gains in health care, recreation and transportation, while education starts fell. Manufacturing starts posted a solid gain in the month, nearly doubling from June’s level.

Through the first seven months of 2021, nonresidential building starts were 4 percent higher when compared to the first seven months of 2020. Commercial starts were up 5 percent and manufacturing starts rose 45 percent, while institutional starts were 1 percent lower.

Residential building

Residential building starts fell 6 percent in July to a seasonally adjusted rate of $400 billion.

Single-family starts lost 6 percent in July, while multifamily starts dipped 4 percent.

Through seven months, residential starts were 30 percent higher than the same period one year ago. Single-family starts were up 34 percent, while multifamily was 19 percent higher.

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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