Dodge Data & Analytics, New York, has reported construction starts increased 11 percent in March. Total construction starts in March were up 1 percent compared with March 2017.
"The construction start statistics can show wide swings month-to-month, and March certainly qualifies as one of the stronger months due to the inclusion of several very large projects," says Robert A. Murray, chief economist for Dodge Data & Analytics. "Looking at the data on a quarterly basis can reduce the volatility present in the monthly statistics, and this year's first quarter shows a continuation of the up-and-down pattern that's been present over the past year—first quarter 2017 up 10 percent, second quarter 2017 down 6 percent, third quarter 2017 up 8 percent, fourth quarter 2017 down 9 percent, and now first quarter 2018 up 2 percent. This up-and-down pattern typically occurs when construction is at a mature stage of expansion, characterized by a slower rate of growth. A decelerating expansion does not necessarily mean that decline will closely follow, and there are several factors during 2018 that will help construction to stay close to recent levels.
"In March, Congress reached agreement on fiscal 2018 federal appropriations, which provide additional funding for several public works programs, especially those that are transportation-related," Murray continues. "Greater funding continues to be present from construction bond measures passed by state and local governments in recent years. The overall economy continues to proceed at a healthy clip, which supports healthy market fundamentals for commercial building. And, while interest rates are rising, the increases so far have been moderate, as shown by the ten-year Treasury bill stabilizing at 2.8 percent to 2.9 percent during March and the first half of April."
Nonresidential building construction fell 1 percent in March. In the commercial category, warehouse construction rose 37 percent; office construction fell 16 percent; store construction decreased 20 percent; and hotel construction dropped 40 percent. In the institutional category, manufacturing plant construction surged 280 percent; transportation terminal construction rose 40 percent; educational building construction grew 8 percent; public buildings dropped 12 percent; amusement-related construction declined 29 percent; health care facility construction fell 32 percent; and churches decreased 41 percent.
Residential building construction fell 2 percent in March. Single-family housing was unchanged, and multifamily construction decreased 7 percent.
Nonbuilding construction increased 73 percent in March.
During the first three months of 2018, nonresidential building was down 17 percent compared with the same time period in 2017. Residential building increased 7 percent, and nonbuilding construction decreased 15 percent. By geographic region, the South Atlantic dropped 1 percent; South Central decreased 5 percent; West declined 9 percent; Midwest fell 10 percent; and Northeast dropped 14 percent.