August contracts increased 19%

September 17, 2020

Dodge Data & Analytics, New York, has reported construction starts rose 19% in August. Total construction starts in August were down 8% compared with August 2019.

“Construction starts continue to make up ground following the nadir in activity in April,” said Richard Branch, chief economist for Dodge Data & Analytics. “Residential and commercial construction are driving the gains, while the public side of building construction is proving to be a drag on growth. The regional pattern has also evened out with gains in starts seen in every region but the Midwest in August—somewhat muting the concern over the potential impact of rising COVID cases in the South and West.

“The nascent recovery in starts, however, will face challenges as summer turns to fall,” he continued. “The expiration of enhanced unemployment insurance benefits and small business loans that were provided in the CARES Act, the budget crises facing state and local governments, and the impending expiration of the FAST Act on Sept. 30 will all have a dampening effect on starts.”

Nonresidential building construction increased 16% in August, in part because of large projects in the office and manufacturing sectors. Manufacturing starts soared 201% in August; commercial construction starts rose 36%; and institutional starts fell 7%.

Residential building construction rose 12% in August. Single-family housing dropped 3%, and multifamily construction increased 62%.

Nonbuilding construction increased 40% in August as two large projects boosted activity.

For the 12 months ending in August, nonresidential building was down 13% compared with the 12 months ending August 2019. Residential building rose 3%, and nonbuilding construction fell 9%.

Tags: Business | Residential | Commercial | Trends

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