Economics
Construction Starts Rise 10% in Feb. from Jan. Level
New construction projects’ value climbed 10% in February from January’s level, hitting a $667.6-billion annual rate, but project starts for the first two months of this year slipped 16% from the same period in 2015, Dodge Data & Analytics has reported.
Dodge D&A said in a report released on March 18 that swings in the volume of major new electric power and natural gas projects helped to produce the monthly upturn and year-over-year decline.
Dodge noted that last month’s starts included a $3-billion phase of a big liquefied natural gas export terminal in Texas and six powerplants that each had price tags of more than $200 million.
In addition, the January-February 2015 period saw several LNG terminals get underway, skewing the comparison with the same months this year, Dodge D&A pointed out.
The Dodge Index rose in February to 141 from January’s 129. The index’s year 2000 level equals 100.
Robert Murray, Dodge chief economist, said in a statement, “On balance, the current economic environment is still favorable for the continued expansion of construction activity, which may not show up in the year-to-date statistics for total construction starts until the second half of the year.’
Nonbuilding construction’s estimated value soared 49% in February from the previous month, to a $200.9-billion seasonally adjusted annual rate. Energy projects propelled that gain, led by the LNG project in Freeport, Texas. Also breaking ground were a $761-million gas-fired powerplant in Connecticut, five solar-energy projects and several big wind farms.
On the downside, public works categories combined to register a 1% decline, as the water supply segment surged 53% but highways and bridges dipped 17%.
Nonresidential construction moved up 4% last month from January’s total to a $185.5-billion annual rate, Dodge reported. Hotels jumped 48% and office buildings posted a 25% increase. But manufacturing tumbled 43%, educational facilities slid 13% and healthcare and public buildings recorded smaller declines.
Residential projects fell 5% to a $281.3-billion annual rate, as single-family housing was down 3% and multifamily projects fell 8%.
Looking at year-to-year, unadjusted comparisons, January-February nonbuilding projects’ total dropped 34%, due partly to a falloff in the electric power-natural gas segment. The nonresidential sector slipped 21% compared with 2015’s first two months but residential was up 9%.
(Engineering News-Record and Dodge, for many years, were both units of McGraw Hill Financial and its predecessor companies. BNP Media acquired ENR in 2015.)
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