March 2017 construction starts rise 5 percent

New construction starts in March increased 5 percent to a seasonally adjusted annual rate of $743.7 billion, reports Dodge Data & Analytics. The March data produced a reading of 157 for the Dodge Index.

According to Dodge Data & Analytics, total construction growth in March was led by the nonbuilding construction sector.

Nonbuilding construction in March jumped 16 percent to $195.7 billion, following its 35 percent increase in February. The public works sector increased 33 percent and the miscellaneous public works category rose 82 percent. In addition, highway and bridge construction rose 1 percent, river/harbor development advanced 32 percent, sewer construction remained unchanged and water supply construction fell 2 percent.

Residential building grew 4 percent in March to $310.8 billion. Multifamily housing rose 26 percent, which accounted for much of the gain, reports Dodge Data & Analytics.

Nonresidential building remained unchanged from its February pace at $237.2 billion. The institutional side of the nonresidential building market rose 3 percent in March, with the transportation terminal category jumping 83 percent. In addition, religious buildings were up 9 percent and public buildings rose 4 percent. Despite this, educational facilities dropped 14 percent and the amusement and recreational category fell 29 percent.

The commercial side of the nonresidential building market increased 7 percent in March, with office construction up 41 percent and commercial garages up 12 percent. Hotels were down 7 percent, stores and shopping centers were down 8 percent, and warehouses were down 14 percent.

The first three months of 2017 experienced a 3 percent decline for total construction starts compared to the same time period in 2016. According to Dodge Data & Analytics, nonbuilding construction dropped 17 percent year-to-date, residential building slipped 1 percent and nonresidential building rose 7 percent.

“The pattern for construction starts in early 2017, with three straight monthly gains, is the reverse of the three straight monthly declines that closed out 2016,” says Robert Murray, chief economist for Dodge Data & Analytics. “While the construction start statistics will frequently show an up-and-down pattern, whether month-to-month or quarter-to-quarter, the improved activity in this year’s first quarter provides evidence that the construction expansion is still proceeding.”