May construction starts increase 5 percent

By |  June 27, 2016

New construction starts in May increased 5 percent from April at a seasonally adjusted annual rate of $636.7 billion, according to Dodge Data & Analytics. This raised the Dodge Index to 135, up from April’s reading of 129.

Dodge Data reports that much of the growth came from the nonbuilding construction sector, which increased as a result of a $3.8 billion oil pipeline in the upper Midwest, as well as seven power plant projects with a combined cost of $4.3 billion.

Nonbuilding construction in May increased 24 percent to $193 billion. The public works categories as a group rose 15 percent, with river/harbor development increasing 81 percent and sewer construction increasing 42 percent. Water supply construction decreased 40 percent, while highway and bridge construction rose 1 percent and the electric power and gas plant category jumped 57 percent.

In May, residential building improved 1 percent to $272.5 billion. The multifamily side of the housing market increased 15 percent, while single-family housing slipped 4 percent.

Nonresidential building in May decreased 6 percent to $171.2 billion. The commercial building categories as a group fell 9 percent, with hotel construction decreasing 22 percent, office construction decreasing 11 percent, and stores and warehouses decreasing 1 and 3 percent, respectively. In addition, the manufacturing plant category in May fell 37 percent.

The institutional side of the nonresidential market held steady in May, reports Dodge Data. The educational facilities category rose 4 percent; healthcare facilities increased 7 percent; church construction rose 6 percent; and public buildings increased 9 percent. However, transportation terminal work fell 9 percent and amusement-related construction fell 13 percent.

According to Dodge Data, the 12 percent decline for total construction starts on an unadjusted basis during the first five months of 2016 was due to diminished activity for both nonbuilding construction and residential building, compared to their pace one year ago. Nonbuilding construction dropped 24 percent year-to-date; nonresidential building fell 21 percent year-to-date; and residential building rose 6 percent year-to-date.

“The construction start statistics have shown annual increases since 2010, including a 10 percent gain in 2015, although the month-to-month pattern has been frequently uneven,” says Robert Murray, chief economist for Dodge Data & Analytics. “This up-and-down behavior continues to be present in 2016, with May seeing a partial rebound after the setback in April.

Avatar photo

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.

Comments are closed