Construction Starts Up 3% in May, Dodge D&A Reports
New construction rose 3% in May, to an annual, seasonally adjusted rate of $729.7 billion, thanks to a burst of electric power and natural gas projects that broke ground during the month, Dodge Data & Analytics says.
Dodge D&A's latest monthly report on construction starts, released on June 19, also showed new construction for the first five months of 2015 soared 25% from the year-earlier period, to $272.5 billion, not adjusted for seasonal variations.
The company, which also owns ENR, said that its Dodge Index of construction activity climbed to 154 in May from April's revised 149. The year 2000 is the index's base year, equalling 100 on the scale.
Nonbuilding construction was the prime factor behind May's overall month-to-month pickup; the sector raced ahead 59% to a $262.7-billion annual rate. Nonbuilding work's hottest segment was electric power plants, which surged 229%, including a $9-billion liquefied natural gas terminal in Corpus Christi, Texas.
Robert Murray, Dodge D&A chief economist, said in a statement, "This lift from unusually large projects is expected to become less pronounced as 2015 proceeds, which still leaves total construction starts growing at about a 10% clip."
But nonbuilding's public works categories dipped 3% last month. Murray said that public works "has proven to be surprisingly resilient so far in 2015, as states and localities have picked up some of the slack from essentially flat federal funding."
Residential construction moved up a modest 2% from April's level, to $258.9 billion, Dodge D&A said, with single-family housing flat and multifamily projects up 7%. Eight $100-million-plus multifamily projects got under way in May, including four in the New York City metro area.
Nonresidential building projects dropped 28%, to $208.1 billion, following a 58% gain in April. An $8.1-billion petrochemical plant that was launched in April skewed the month-to-month comparisons in the manufacturing building segment.
Educational buildings, the largest nonresidential-buildings category, increased 8%, with major projects at Boston University; the University of Maryland, College Park; Louisiana State University; and Harvard University's Kennedy School of Government.
But the amusement, church and transportation terminals segments also posted declines in May.