August construction starts fell 9% amid rising materials costs, labor shortages

September 21, 2021

Dodge Data & Analytics, New York, has reported construction starts declined 9% in August as high materials prices, supply chain issues, labor shortages and the Delta variant of COVID-19 affect the industry.

“Construction starts have hit a rough patch following the euphoria seen in the early stages of recovery from the pandemic,” said Richard Branch, chief economist for Dodge Data & Analytics. “The Delta variant has raised concern that the fledgling economic recovery is stalling out, undermining the already low level of demand for most types of nonresidential buildings. Additionally, significant price increases for construction materials, logistic constraints and labor shortages are making a challenging situation worse. Construction starts are likely to remain unsteady over the next few months. However, the dollar value of projects entering planning continues to suggest that the recovery in construction starts should resume early in the new year.”

Nonresidential building construction fell 13% in August. Commercial construction starts decreased 10%, institutional starts fell 15%, and manufacturing starts dropped 37%. Despite overall losses, there were gains in retail, parking and public buildings.

Residential building construction fell 9% in August. Single-family housing dropped 12%, and multifamily construction increased 1%.

Nonbuilding construction fell 2% in August.

For the 12 months ending August, nonresidential building was down 8% compared with the 12 months ending August 2020. Residential building rose 21%, and nonbuilding construction fell 2%.

Tags: Business | Residential | Commercial | Trends

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