Construction Markets
Construction Starts Slip 1% in March, Dodge Construction Network Reports
Chart Courtesy Dodge Construction Network
U.S. construction starts dipped in March by 1% to a seasonally adjusted annual rate of $1.06 trillion, compared with the February level, Dodge Construction Network reported.
In its latest monthly construction starts report, released on April 23, Dodge said that among the three main construction sectors, nonbuilding construction, which includes infrastructure work, rose 7% in March, to a rate of $278.8 billion, but nonresidential building dropped 9%, to $398.5 billion. Residential building edged up 1%, to $394.8 billion, the report said.
Richard Branch, Dodge Construction Network’s chief economist, said in a statement, “The construction sector has hit a soft patch to start 2024.” Branch added, “However, this should not be overly surprising given high rates and restrictive credit.”
He said in a video released alongside the monthly report, "This is essentially what we were anticipating would happen as the quarter comes to a close."
Among all construction segments, Branch noted that commercial construction declined about 1%. Within that category, warehousing and retail were up, "but manufacturing was down pretty sharply.”
On the other hand, institutional construction rose 4%,"thanks to some fairly sizable healthcare projects getting started during the month."
Regarding interest rates, Branch said Dodge had been thinking that the Federal Reserve might cut rates in June, But now," he said, "I think the first cut will probably come in September."
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Branch added, "I think we’re in for probably another soft couple of months here as we get into early summer."
Nevertheless, he said, based on the projects in line for groundbreakings in the next nine months, "I do think that we’ll see a turnaround in activity here." Branch expects that publicly funded projects are the ones likely to advance, while commercial projects "will continue to be challenged."
Largest Project Starts
According to Dodge, the largest nonbuilding projects breaking ground in March were the $1-billion Eland solar and battery storage facility in Mojave, Calif.; the $908 million State Route 826 road and bridge project in Miami, Fla.; and the $650-million Serrano solar and storage project in Arizona's Pima and Pinal counties.
The largest nonresidential building projects to begin in March were: the $1.3-billion Rady Children's Hospital intensive care unit in San Diego; the $600-million Google data center in The Dalles, Ore.; and a $532-million federal prison in Leavenworth, Kan.
Dodge said the largest multifamily housing projects breaking ground last month were; the $385-million One Naples Ritz Carlton residences in Naples, Fla.; the $261-million 100 North Main mixed-use projects in Memphis, Tenn.; and the $190-million August at Steelpointe Harbor project in Bridgeport, Conn.
