July Construction Starts Unchanged Over June
Construction starts in July remained generally unchanged from June’s pace, holding steady in a market that has seen 19% growth during the first seven months of 2015, according to Dodge Data & Analytics.
The seasonally adjusted rate for total construction starts was $629.4 billion, with improvements seen in both the non-residential and residential building sectors, Dodge reported on August 20. However, non-building construction continued to slide back from exceptional activity seen earlier this year that reflected the start of some megaprojects, including several large liquefied-natural-gas terminals.
Dodge’s Chief Economist Robert A. Murray said that taking out the volatile utility and gas-plant category, total construction starts during the first seven months of 2015 would be up a more moderate 10% from the same period a year ago.
While June and July were at the low end of what has been reported so far in 2015, they were still above the Dodge index average of 125 for 2014 as a whole.
“The first half of 2015 showed wide swings in the pattern of total construction starts, affected by the presence or absence of unusually large projects,” Murray said in a statement.
“Amidst these top-line swings, the underlying trend of activity has been generally upward relative to last year,” Murray said.
Non-residential building increased 2% to $194.0 billion in July. The commercial category as a whole bounced back 12% in July, after retreating by the same percentage amount in June. The sector was supported largely by a jump in office construction, which climbed 7%.
New manufacturing plant construction starts were generally subdued in July, falling 39% from June, and substantially lower than the elevated amounts back in February and April that featured the start of several large petrochemical plants.
Residential building advanced 4% in July to $288.5 billion, helped largely by a 21% surge in multifamily housing.
Non-building construction in July dropped 9% to $146.9 billion, largely as a result of diminished activity for most of the public-works categories, which fell 13% as a group.
Highway and bridge construction retreated 19% in July, making it three out of the past four months that weaker activity has been reported.
“The uncertainty arising from the expiring extension of the surface-transportation legislation on July 31, along with the depleted Highway Trust Fund, likely played some role in July’s pullback for highway and bridge construction.”
Despite the decline, several large highway and bridge projects began in July, including the $429-million Southern Ohio Veterans Memorial Highway in Portsmouth, Ohio; the $264-Belt Shore Parkway Mill Basin Bridge replacement in Brooklyn, N.Y.; and the $187-million Interstate 85 widening and reconstruction in North Carolina.
The highway sector should see some improvement, Murray noted, as a result of a recently passed stopgap: the $8-billion, three month surface-transportation extension bill.