Nonresidential Building Increases in MarchMay 3rd, 2016 | Category: Industry News
New construction starts in March totaled $660.5 million, receding 1 percent from February’s pace, according to Dodge Data & Analytics. However, nonresidential starts climbed 23 percent to $228.1 billion, strengthening for the second month in a row after February’s 5-percent gain.
The March data produced a reading of 140 for the Dodge Index, compared to a revised 142 for February.
“While March construction activity was down slightly from February, it stayed above the lackluster performance witnessed during the second half of last year that continued through January,” says Robert A. Murray, chief economist for Dodge. “What’s noteworthy about the March report is the renewed strength shown by nonresidential building, and in particular its institutional building segment. Nonresidential building had settled back 5 percent in 2015 after its 24-percent surge in 2014, reflecting not only a steep 36-percent plunge for manufacturing plant construction but also a slight 1-percent decline for institutional building.”
The institutional building group in March 2016 spiked 44 percent, with most of the structure types reporting growth. Leading the way was the transportation terminal category, up 339 percent. Educational facilities, the largest nonresidential building category by dollar volume, advanced 20 percent in March. The public buildings category and healthcare facilities rebounded from weak February amounts, rising 55 and 53 percent, respectively.
The commercial segments as a group increased 5 percent in March, reflecting a mixed pattern by project type. Hotel construction rose 47 percent, and store construction in March increased 19 percent. On the negative side, office construction retreated 27 percent in March after its 26-percent hike in February.
Residential building, at $292.0 billion (annual rate), grew 3 percent in March. Multifamily housing increased 15 percent, bouncing back following a 6-percent decline in February.
The 10-percent decline for total construction starts on an unadjusted basis during the first three months of 2016 compared to last year was due to a varied pattern by major sector. Nonresidential building dropped 9 percent year-to-date, with manufacturing plant construction down 53 percent, the institutional building segment down 9 percent, while the commercial building segment ran counter with a 5-percent gain. Residential building grew 12 percent year-to- date, with similar growth for single family housing, up 11 percent, and multifamily housing, up 13 percent.