Construction starts dropped 13% in March from February’s level, to a seasonally adjusted annual rate of $633.3 billion, Dodge Data & Analytics reports.
In its latest monthly construction report, released on April 21, Dodge D&A also says that megaproject starts in February skewed the comparison.
If projects valued at more than $1 billion are excluded from both months' figures, March’s total is up 4% from February’s, Dodge D&A said. (ENR is part of Dodge D&A.)
Robert A. Murray, Dodge D&A chief economist, said in a statement: “The presence of unusually large projects will affect the month-to-month pattern for construction starts and that’s certainly been true during the early months of 2015.”
For example, February’s starts included an $8.4-billion liquefied natural gas export terminal in Louisiana, a $1.2-billion solar-energy project in California and a $3-billion ethane cracker and propane dehydrogenation facility in Texas.
March wasn’t devoid of megaprojects: a $2.3-billion highway project got under way in Florida during the month.
The Dodge Index for March was 134, compared with a revised 155 for February and 132 in January. The index for 2014 averaged 124. The 2000 level equals 100.
For a longer-range look at construction trends, Dodge D&A said that starts for the first quarter of 2015 rose 28% from the same period last year. Those figures aren’t adjusted for seasonal variations.
Looking at March's month-over-month results for construction segments, nonresidential building dipped 19% after a 43% jump in February, as manufacturing, commercial building, offices, and warehouses all posted double-digit decreases.
Retail facilities, on the other hand, climbed 13% last month.
Nonbuilding projects’ 22% decline was due to a 73% drop in the electric utility-gas plant segment, Dodge D&A said.
Public works, however, was a bright spot, including a 30% gain in highway and bridge construction, paced by Florida’s $2.3-billion Interstate 4 upgrade.
Murray said, “Although there’s concern that public works construction will be dampened by the uncertainty caused by the soon-to-expire federal transportation legislation, a healthy amount of highway and bridge work has reached the construction-start stage so far in 2015.”
The current highway-transit authorization measure lapses May 31.
Miscellaneous public works, which includes pipelines, surged 86% last month and the river-harbor and water supply categories recorded double-digit increases.
Residential construction was about flat with February at a $251.4-billion annual rate, Dodge D&A said.
Multifamily projects slipped 4% after a 45% gain in February.
As the death toll from the record-setting hurricane mounts in the Bahamas and damage estimates there and in the U.S. head into the billions, industry experts see increasing pressure to address infrastructure resilience.