New construction starts drop 7 percent in November 2018

Most of the total construction start decline in November was the result of nonresidential building dropping 15 percent. Chart courtesy of Dodge Data & Analytics.

New construction starts in November 2018 slipped 7 percent from October to a seasonally-adjusted rate of $789.3 billion, according to Dodge Data & Analytics.

November’s data measured a reading of 167 for the Dodge Index, down from a revised 179 for October, returning the index to a level closer to the 166 average for 2017.

“Amidst the monthly ups and downs, the construction start statistics show that on balance the construction industry expansion was still underway in 2018, although the rate of growth has slowed considerably from the 7 percent gains for total construction reported during 2016 and 2017,” says Robert Murray, chief economist for Dodge Data & Analytics.

Most of the total construction decline was reflective of a 15 percent drop in nonresidential building, a stark contrast to a 43 percent increase in October. There were eight large projects, each valued at $500 million or more totaling $7.4 billion, that increased nonresidential building in October.

However, there were just three large projects with a value of $500 million or more, totaling $2.8 billion, that were entered as nonresidential building starts in November.

The other two major construction sectors witnessed a slight reduction in activity in November, as residential building dropped 1 percent while nonbuilding construction dropped 2 percent.

During the January-to-November period last year, total construction starts on an unadjusted basis were $738.2 billion, a 1 percent increased from the same time period in 2017. In addition, total construction starts for the first 11 months of 2018 were up 2 percent.