Dodge Data & Analytics, New York, has reported construction starts increased 10% in May. Total construction starts in May were down 9% compared with May 2018.
“The presence of very large projects frequently causes volatility in the month-to-month pattern of construction starts, and that’s certainly been the case during March, April and now May,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “Amidst the volatility, the pace of construction starts has on balance been sluggish so far in 2019, as activity has been generally lower than the healthy volume witnessed during the first half of last year. For public works, there was some dampening in early 2019 arising from the partial government shutdown, although highway and bridge construction has shown improvement in recent months. For nonresidential building, the boost coming from very large projects so far this year has not been of the same magnitude as what took place last year. For residential building, multifamily housing has pulled back from last year’s strength, while single-family housing has been essentially flat.
“At the same time, there are still positive factors in the current environment affecting construction,” Murray continues. “Federal appropriations for fiscal 2019 are in place, and funding support is coming from the state and local bond measures passed in recent years. Market fundamentals for commercial building and multifamily housing strengthened during 2018 and early 2019, while interest rates remain low. As 2019 proceeds, it’s expected that the shortfall between this year’s level of construction starts compared to last year will narrow.”
Nonresidential building construction increased 7% in May. In the commercial category, manufacturing plant construction soared 350%; warehouse construction jumped 39%; hotel construction increased 9%; store construction grew 4%; office construction dropped 17%; and commercial garages declined 26%. In the institutional category, amusement-related construction jumped 54%; health care facility construction grew 27%; educational building construction slipped 1%; public buildings dropped 3%; and transportation terminal construction plunged 63%.
Residential building construction rose 2% in May. Single-family housing grew 2%, and multifamily construction grew 2%.
Nonbuilding construction increased 32% in May.
During the first five months of 2019, nonresidential building was down 3% compared with the same time period in 2018. Residential building decreased 12%, and nonbuilding construction dropped 11%. By geographic region, the South Central slipped 1%; Northeast dropped 5%; Midwest declined 8%; South Atlantic fell 12%; and West decreased 15%.
