June construction starts fell 7% amid high materials costs

July 21, 2021

Dodge Data & Analytics, New York, has reported construction starts declined 7% in June as high materials prices significantly affected single-family housing.

“Unabated materials price inflation has driven a significant deceleration in single-family construction,” said Richard Branch, chief economist for Dodge Data & Analytics. “Lumber futures have eased in recent weeks, but builders are unlikely to see much relief over the short term, meaning building costs will continue to negatively influence the housing industry. On the other hand, the nascent recovery in nonresidential buildings has continued on as projects pile up in the planning stages. These mixed signals coming from residential and nonresidential construction starts suggest that recovery from the pandemic will remain uneven in coming months as rising materials prices and labor shortages weigh on the industry.”

Nonresidential building construction dropped 7% in June. Commercial construction starts increased 12% with all categories posting gains, and institutional starts fell 9%.

Residential building construction fell 5% in June. Single-family housing dropped 8%, and multifamily construction grew 2%.

Nonbuilding construction fell 13% in June.

For the 12 months ending June, nonresidential building was down 14% compared with the 12 months ending June 2020. Residential building rose 22%, and nonbuilding construction fell 6%.

Tags: Business | Residential | Commercial | Trends

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