August's Construction Starts Fall from July, But Are Up from 2014

New construction projects’ volume dipped 11% in August from the previous year’s level but results for 2015’s first eight months rose 15% year over year, Dodge Data & Analytics has reported.

Dodge said in a report released on Sept. 22 that August’s construction starts dropped to a seasonally adjusted $554.5-billion annual rate with decreases in nonresidential, housing and nonbuilding projects.

The Dodge Index also fell in August to 117, from 133 in June and July. (The 2000 level equals 100 on the index.)

Robert Murray, Dodge chief economist, said in a statement that though August’s new project volume was “notably subdued compared to recent months, it’s useful to keep in mind that construction starts on a monthly basis will often show an up-and-down pattern, and the year-to-date statistics depict an expansion that’s still proceeding.”

Nevertheless, many sectors did record downturns in August. Nonresidential building starts tumbled 16% from July’s level, to a $160.7-billion rate. There were steep, double-digit declines in hotels (-35%) and office buildings (-34%).

Residential construction dipped 8%, to a $265.5-billion annual rate, including a 23% drop in multifamily housing projects.

The nonbuilding segment was down 12% to a $128.3-billion rate, its third-straight monthly decrease, Dodge noted.

Within the nonbuilding sector, highway and bridge construction posted a 15% decrease. Murray noted that Congress in July did approve an $8-billion infusion for the Highway Trust Fund. But he added that “there’s still some uncertainty as to when Congress will be able to pass a new multiyear federal transportation bill.”

On the positive side, the comparisons with 2014 were strong for residential starts, which gained  8%, and nonbuilding work, which soared 43%, thanks in part to a jump in the electric utility and gas plant category.

But nonresidential building was off 5% from the 2014 period, including a 28% falloff in in manufacturing projects, Dodge reported.

All regions recorded increases for January-August, led by the South Central area (+31%) and Northeast (+20%). The smallest increase was in the Midwest, where construction volume rose a modest 4%.

(ENR was a part of Dodge D&A until July, when it was acquired by BNP Media.)

Source: ENR.Construction.com