July Construction Starts Increase 2 PercentAugust 23rd, 2019 | Category: Industry News
At a seasonally adjusted annual rate of $849.6 billion, new construction starts in July advanced 2% from the previous month, according to Dodge Data & Analytics. This marked the third consecutive monthly increase for total construction starts, following gains of 10% in May and 9% in June.
By major sector, nonbuilding construction led the way in July with a 24% hike, boosted by several large public works and electric utility/gas plant projects. Nonresidential building in July settled back 4%, following a 16% jump in June that included the start of the $1.1 billion Terminal 5 expansion at Chicago’s O’Hare International Airport. Residential building in July slipped 6%, as multifamily housing retreated from its elevated June amount.
Through the first seven months of 2019, total construction starts on an unadjusted basis were $459.3 billion, down 6% from the same period a year ago.
“The strengthening volume of construction starts in recent months indicates that activity is moving closer to the levels reported in 2018, following a sluggish performance at the outset of 2019,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “Recent support has come from those construction sectors that are partially influenced by public funding, namely institutional building with its June gain and now public works with its July gain. This is typically what takes place during the latter stages of a construction expansion, which also helps to keep the initial stage of a broad-based slowdown to stay moderate. The current year has already seen a pullback for multifamily housing after a robust 2018, and single family housing has not yet provided evidence that it can move beyond its extended plateau any time soon. The commercial building segment so far in 2019 has been mixed – office construction remains on track for a modest gain, but there’s also been generally depressed activity for store construction and some slippage for hotel and warehouse starts.”