July 2019 construction starts improve 2 percent

By |  August 27, 2019
The July statistics raised the Dodge Index to 180. Photo courtesy of Dodge Data & Analytics

The July statistics raised the Dodge Index to 180. Click to enlarge. Chart courtesy of Dodge Data & Analytics

New construction starts in July advanced 2 percent at a seasonally adjusted annual rate of $849.6 billion from the previous month, reports Dodge Data & Analytics. This marks the third consecutive monthly increase for total construction starts, following a 9 percent gain in June and a 10 percent gain in May. The July statistics raised the Dodge Index to 180.

Nonbuilding construction in July was $256.1 billion, up 24 percent from June. The miscellaneous public works category soared 177 percent, the water supply category jumped 82 percent and sewer construction rose 30 percent. In addition, highway and bridge construction increased 9 percent, rebounding after a 5 percent decline in June.

Nonresidential building in July fell 4 percent to $293.4 billion, with the institutional building categories as a group declining 17 percent. With that, the transportation terminal category plunged 64 percent, the public buildings category fell 59 percent and the healthcare facilities category retreated 10 percent. In addition, educational facilities fell 3 percent, while the religious buildings category rose 95 percent.

The commercial buildings category as a group increased 4 percent, with store construction growing 24 percent, hotel construction advancing 12 percent and office construction rising 1 percent. Warehouse construction fell 13 percent and the manufacturing building category jumped 58 percent, as well.

Residential building in July was $300.1 billion, down 6 percent from June. Multifamily housing fell 16 percent and single-family housing fell 2 percent. According to Dodge Data & Analytics, the July pace for single family housing was down 6 percent from its average monthly rate during 2018, as affordability constraints resulting from high home prices continue to outweigh the benefits of low mortgage rates.

The 6 percent decline for total construction starts on an unadjusted basis during the January-July period of 2019 was due to reduced activity for two of the three main construction sectors, Dodge Data & Analytics adds. Year-to-date, non-building construction rose 2 percent, while both nonresidential building and residential building each fell 9 percent.

“The strengthening volume of construction starts in recent months indicates that activity is moving closer to the levels reported in 2018, following a sluggish performance at the outset of 2019,” says Robert Murray, chief economist for Dodge Data & Analytics. “Recent support has come from those construction sectors that are partially influenced by public funding, namely institutional building with its June gain and now public works with its July gain.”

In addition, Dodge Data & Analytics recently released its midyear update on construction starts and overall construction spending.

Allison Kral

About the Author:

Allison Kral is the former senior digital media manager for North Coast Media (NCM). She completed her undergraduate degree at Ohio University where she received a Bachelor of Science in magazine journalism from the E.W. Scripps School of Journalism. She works across a number of digital platforms, which include creating e-newsletters, writing articles and posting across social media sites. She also creates content for NCM's Portable Plants magazine, GPS World magazine and Geospatial Solutions. Her understanding of the ever-changing digital media world allows her to quickly grasp what a target audience desires and create content that is appealing and relevant for any client across any platform.

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