Total construction starts are up 1% in the first half of 2018 compared to this time last year, according to Dodge Data & Analytics. Year-to-date starts have reached $395.7 million, following $390.4 million recorded in the first six months of 2017.
“Overall, the industry is performing at a healthy clip,” says Bob Murray, chief economist and vice president of Dodge Data & Analytics. He says that with the exception of the volatile natural gas power plant category, whose utility gas starts have experienced broad swings over the past several years, construction has risen 5% overall from this time last year.
Commercial and multifamily construction starts ranked by dollar volume have grown in five major metropolitan markets in the first half of 2018, according to the Aug. 9 Dodge report. On a national level, however, starts in these sectors are down 1% since the first half of 2017.
“The industry has shown some deceleration, but it is more a leveling-off process right now as opposed to decline,” says Murray. He adds that multifamily housing has been “surprisingly resilient,” while office construction has experienced the largest amount of growth in the commercial sector.
The New York metropolitan area had a particularly strong first half, according to Dodge. With $16.1 billion in construction starts, the region accounted for 16.1% of total multifamily and commercial U.S. starts so far in 2018. Other strong markets include Washington, D.C., Miami and Boston, while Dallas, Los Angeles and San Francisco showed decreasing numbers in these sectors. San Francisco, however, saw a jump in non-building construction due to the $225-million wastewater treatment plant that broke ground in July.
Among other types of construction, Murray cites an increase in the educational sector, with large projects such as a $202-million high school in Somerville, Mass., breaking ground in the first half of the year.
Coming off of a particularly high level of construction reported in the first half of 2017, starts in the transportation sector have seen some decline, but “by recent historical standards they remain quite strong,” says Murray.
For the rest of the year, Murray expects total construction starts to reach 3% above 2017, as reported in the Dodge 2018 outlook last fall. While higher material prices may have a negative impact on construction in 2019, for the remainder of the year activity remains “quite healthy.”