July construction starts fell 3% amid rising materials costs

August 19, 2021

Dodge Data & Analytics, New York, has reported construction starts declined 3% in July as high materials prices and the Delta variant of COVID-19 affect the industry.

“Construction material prices continue their march higher and are weighing heavily on construction starts,” said Richard Branch, chief economist for Dodge Data & Analytics. “Lumber and copper prices have fallen in recent weeks; however, steel, plastic and other construction-related products are continuing their ascent. These increases will continue to impact construction starts over the coming months, somewhat muting the impact of stronger economic activity. A further risk to the sector is the rising number of COVID-19 cases due to the Delta variant. While we don’t expect significant business restrictions in response, it is a risk that cannot be fully discounted. On the upside, projects entering the planning stage remain at levels not seen in several years and forward progress on an infrastructure program and the federal budget provides hope that brighter days are ahead.”

Nonresidential building construction dropped 1% in July. Commercial construction starts decreased 19% with hotels posting gains, and institutional starts rose 11% with gains in health care, recreation and transportation.

Residential building construction fell 6% in July. Single-family housing dropped 6%, and multifamily construction declined 4%.

Nonbuilding construction fell 1% in July.

For the 12 months ending July, nonresidential building was down 18% compared with the 12 months ending July 2020. Residential building rose 23%, and nonbuilding construction fell 2%.

Tags: Business | Residential | Commercial | Trends


Sponsored Link