Construction Starts in September Slip 5 Percent Nationwide
This compares to eight multifamily projects valued at $100 million or more that reached groundbreaking in August, and 16 such projects that were entered as July starts. In September, New York City continued to be the leading metropolitan area in terms of the dollar amount of multifamily construction starts, but after reaching a peak in June, New York’s multifamily activity has retreated.
New York City’s 421—a tax abatement program that provided developers of rental housing with partial tax exemptions for up to 25 years—expired in June and led to a surge of multifamily construction starts before its expiration. Through the first nine months of 2015, the top five metropolitan areas ranked by the dollar amount of multifamily starts were as follows—New York City, Miami, Los Angeles, Washington, D.C., and Boston.
Single-family housing in September receded 3%, slipping back after its 2% August gain. The September pace for single-family housing was still 10% higher than the average monthly amount reported during 2014. By geography, single-family housing in September showed declines for all five major regions—the South Central and West, each down 1%; the Midwest and Northeast, each down 2%; and the South Atlantic, down 7%.
Nonbuilding Construction
Nonbuilding construction in September increased 5% to $133.9 billion (annual rate), making a partial rebound after dropping 12% in August. The electric utility and gas plant category provided the upward push, advancing 19%. Large electric utility projects reported as September starts included the following—two solar power projects in Utah, valued at $1.2 billion and $729 million respectively, a $320-million transmission line project in New Jersey, and a $200-million biomass energy plant in Georgia.
The public works categories in September were unchanged as a group from their August pace, due to varied behavior by project type. River/harbor development climbed 29% in September, reflecting two projects in Savannah, Ga.—$134 million for dredging the harbor entrance channel and $100 million for harbor expansion.
Water supply construction climbed 12% in September, while highway and bridge construction edged up 1% with the help of an $85-million deck rehabilitation project for the Liberty Bridge in Pittsburgh.
On the negative side, the miscellaneous public works category dropped 2% in September, although the latest month did include the start of a $303-million automated people mover system at Tampa International Airport. Sewer construction in September dropped 23%, following its 21% hike in August.
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The 12% increase for total construction starts on an unadjusted basis during the first nine months of 2015 came from growth for residential building and nonbuilding construction, while nonresidential building was down moderately after posting a substantial gain in 2014.
Residential building climbed 17% year-to-date, with multifamily housing up 26% and single family housing up 13%. Nonbuilding construction year-to-date jumped 35%, with electric utilities and gas plants up 205% and public works up 4%.
The considerable year-to-date increase for nonbuilding construction has become smaller as 2015 has proceeded. Nonresidential building year-to-date retreated 7%, due primarily to a 30% plunge for the manufacturing building category. The commercial building andinstitutional building groups were essentially unchanged year-to-date, registering slight 2% and 3% declines respectively.
By major region, total construction starts during the January-September period of 2015 revealed this pattern—the South Central, up 24%; the Northeast, up 22%; the South Atlantic, up 9%; the West, up 4%; and the Midwest, up 2%.
