Nonbuilding construction starts up in March 2020

While nonbuliding construction starts were up in March 2020, two other categories Dodge Data & Analytics measures (nonresidential building and residential building) were down. Click to enlarge | Chart: Dodge Data & Analytics

Total construction starts declined 5 percent from February to March to a seasonally-adjusted annual rate of $746.9 billion, Dodge Data & Analytics reports.

Volatility caused by the presence or absence of large projects in healthcare and Dodge’s utility/gas plant category skewed the analysis, though.

In March, nonresidential building starts fell 9 percent from February while residential building dropped 11 percent. Nonbuilding construction starts rose 14 percent in March.

For the trailing 12 months ending in March, total construction starts were 2 percent higher than they were for the same period ending in March 2019. Residential building starts were 3 percent higher while nonbuilding starts were up 5 percent for the 12 months ending in March 2020. Nonresidential building starts were down less than 1 percent.

“Considering the calamity that occurred towards the end of March as the fallout from the COVID-19 (coronavirus) hit the economy, construction starts held up rather well,” says Richard Branch, chief economist at Dodge Data & Analytics. “Construction starts in March were unlikely to be greatly impacted as projects that broke ground during the month likely had materials sourced and in-place and labor booked well ahead of the scheduled groundbreaking. That momentum and planning is difficult to reverse at the last minute.

“Additionally, most of the stay-at-home orders and construction moratoriums were not instituted until the last week of the month and into April,” Branch adds. “Therefore, April construction starts are likely to be a very different story with states like New York, New Jersey and Pennsylvania among others banning construction activity. April’s starts data will be the first true indication of how the crisis will impact the construction industry.”

Nonbuilding construction

Nonbuilding construction jumped 14 percent in March to a seasonally-adjusted annual rate of $168.9 billion due to the start of several large electric power facilities. However, when the massive 161 percent gain in the utility/gas plant category is removed from the total, nonbuilding starts fell 9 percent during the month.

Highway and bridge starts rose 5 percent, while the environmental public works category dropped 5 percent and the miscellaneous nonbuilding category fell 44 percent.

The largest nonbuilding project to break ground in March was the $1 billion 1,085 MW Indeck Niles Energy Center power plant in Niles, Michigan. Also starting in March were the $600 million Jordan Creek Wind Farm in Williamsport, Indiana, and the $469 million Titan Solar Project in Culberson County, Texas.

Nonresidential construction

Nonresidential building starts fell 9 percent from February to March to a seasonally-adjusted annual rate of $259.8 billion. Commercial building starts were 5 percent lower, with losses in three of the five commercial sub-categories.

Manufacturing buildings dropped 7 percent during the month, while institutional buildings dropped 12 percent. Institutional buildings posted a large gain in February due to the start of several large healthcare facilities, which were not present in the March statistics. Still, education facilities posted a solid 18 percent gain in March, Dodge says.

The largest nonresidential building project to break ground in March was the $616 million Duncan Neuroscience Research facility in St. Louis. Also getting started in March was a $415 million Amazon fulfillment warehouse in Wilmington, Delaware, and a $369 million Amazon fulfillment center in Colorado Springs, Colorado.

Residential construction

Residential building starts moved 11 percent lower in March to a seasonally-adjusted annual rate of $318.2 billion. During the month, single-family starts dropped 14 percent while multifamily starts lost 3 percent.

The largest multifamily structure to break ground in March was the $420 million Hunter’s Point South mixed-use building in Long Island City, New York. Also starting during the month was the $200 million Piazza Terminal mixed-use building in Philadelphia and the $125 million Adeline Residences in Phoenix.

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