November 2017 construction starts fall 12 percent

By |  December 28, 2017

New construction starts in November dropped 12 percent from October to a seasonally adjusted annual rate of $650.5 billion.

This decrease lowered the Dodge Index to 138, down from 157 in October and this year’s high of 173 for September, reports Dodge Data & Analytics.

Nonresidential building in November was $220.1 billion, a 14 percent drop from October. The institutional building segment in November fell 13 percent, with a 59 percent drop for the amusement category. In addition, public buildings were down 51 percent and transportation terminals were down 22 percent. Despite this, educational facilities rose 12 percent, healthcare facilities improved 3 percent and religious buildings increased 5 percent.

The commercial categories group declined 9 percent in November, with warehouse construction falling 13 percent, hotel construction dropping 10 percent and office construction slipping 3 percent. The manufacturing buildings category fell 38 percent, as well.

Residential building in November was up 1 percent at $302.1 billion. Single-family housing rose 4 percent and multifamily housing decreased 5 percent.

Finally, nonbuilding construction in November was $128.4 billion, down 32 percent from October. The public works categories as a group fell 34 percent, including a 49 percent plunge for the miscellaneous public works category. In addition, highway and bridge construction dropped 12 percent, sewer construction fell 6 percent, water supply construction decreased 19 percent and river/harbor development plunged 64 percent. The electric utility/gas plant category also receded 9 percent in November.

“While total construction starts fell considerably during October and November, the declines came after an exceptionally strong September,” says Robert Murray, chief economist for Dodge Data & Analytics. “If one takes the average of September, October and November, total construction starts during that period would be down only 1 percent from the average of the previous eight months. On balance, the construction expansion has continued during 2017, although it’s true that the rate of growth has slowed from the 6 percent gain reported for 2016 as well as the 11 percent to 13 percent yearly gains reported from 2012 through 2015.”

During the first 11 months of 2017, total construction starts on an unadjusted basis were $687.1 billion, up 1 percent from a year ago. According to Dodge Data & Analytics, the year-to-date increase for total construction was restrained by a 39 percent fall in the electric utility/gas plant category.

Through the first 11 months of 2017, nonresidential building advanced 7 percent, residential building grew 2 percent and nonbuilding construction fell 7 percent.

Allison Kral

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.

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