March 2019 construction starts leap 16 percent

Click to enlarge. Chart courtesy of Dodge Data & Analytics

New construction starts in March advanced 16 percent from the previous month to a seasonally adjusted annual rate of $809.2 billion, according to Dodge Data & Analytics. The March data produced a reading of 171 for the Dodge Index (2000=100), up from 148 in February.

Nonbuilding construction in March increased 40 percent to $214.7 billion (annual rate), following four straight months of decline that saw activity drop a combined 19 percent. In this sector, the electric utility and gas plant category soared 116 percent. In addition, the public works categories as a group improved 21 percent, miscellaneous public works increased 84 percent, and highway and bridge construction grew 4 percent. The top five states for highway and bridge construction starts in March, ranked by dollar volume, were Texas, California, Pennsylvania, Florida and North Carolina.

Nonresidential building in March advanced 24 percent to $303.3 billion, reports Dodge Data & Analytics, with the manufacturing plant category jumping 108 percent, the commercial categories group rising 20 percent and hotel construction improving 60 percent. Store construction also grew 11 percent and commercial garage construction increased 2 percent, although warehouse construction retreated 29 percent.

The institutional side of nonresidential building grew 17 percent in March, with amusement-related construction growing 90 percent, educational facilities improving 6 percent and healthcare facilities rising 2 percent. In addition, public buildings rose 48 percent, religious building improved 7 percent and transportation terminals fell 22 percent.

Residential building in March dropped 3 percent to $291.2 billion, reports Dodge Data & Analytics. Multifamily housing fell 12 percent, and single-family housing edged up 1 percent.

“The month-to-month pattern for construction starts is often affected by the presence or absence of very large projects, and March certainly benefitted from groundbreaking for a number of very large projects,” says Robert Murray, chief economist for Dodge Data & Analytics. “It remains true that the construction expansion is decelerating, but the March upturn indicates that the loss of momentum won’t be as pronounced as suggested by the subdued activity in January and February. It’s still expected that the overall dollar amount for construction starts for 2019 will be able to stay close to what was reported for 2018.”

Total construction starts for the most recent 12 months held steady compared with the amount of the previous period. By major sector, nonresidential building increase 2 percent, residential building grew 1 percent and nonbuilding construction dropped 4 percent.