February 2017 construction starts improve 2 percent

By |  March 21, 2017

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New construction starts in February rose 2 percent at a seasonally adjusted annual rate of $706.4 billion, reports Dodge Data & Analytics. In addition, the February statistics produced a reading of 149 for the Dodge Momentum Index. This follows a 15 percent hike in January.

According to Dodge Data & Analytics, much of February’s advance came from a strong performance by the public works sector, led by the start of a $1.4 billion natural gas pipeline in Ohio, West Virginia and Pennsylvania.

In February, nonbuilding construction jumped 35 percent to $167.7 billion, reporting its highest level of activity in eight months. The public works category as a group rose 24 percent, the miscellaneous public works category rose 29 percent, and highway and bridge construction rose 38 percent.

Nonresidential building in February dropped 9 percent to $238.5 billion. This followed an 18 percent increase in January. In this sector, the institutional categories as a group were down 14 percent. Transportation terminal work fell 62 percent and the public buildings category fell 30 percent. Despite this, the amusement and recreation category surged 101 percent, educational facilities increased 12 percent and the religious building category rose 25 percent.

The commercial side of the nonresidential market also dropped, falling 11 percent. Office construction fell 40 percent, commercial garages fell 17 percent and hotels fell 3 percent. Warehouses and stores both experienced gains, 47 percent and 7 percent, respectively.

Residential building in February dropped 3 percent to $300.2 billion. According to Dodge Data & Analytics, the decline was due to a 23 percent retreat for multifamily housing. In addition, single-family housing grew 5 percent, moving upward for the fifth straight month.

The 4 percent slide for total construction starts on an unadjusted basis for the first two months of 2017 compared to the first two months of 2016 was the result of mixed behavior by major sector, Dodge Data & Analytics reports. Nonbuilding construction year-to-date fell 31 percent; residential building year-to-date fell 1 percent; and nonresidential building year-to-date rose 21 percent.

“The first two months of 2017 provide evidence that construction starts are still trending upward, even with the loss of momentum that occurred toward the end of 2016,” says Robert Murray, chief economist at Dodge Data & Analytics. “The subdued performance by public works and electric utilities in recent months had restrained the level of total construction starts, so their improved activity in February is a welcome development.”

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