Construction Starts Dip Again in September
September continues sluggish performance seen in August but the industry is still up compared to last year.
The latest numbers from Dodge Data & Analytics are in, and once again the results are a mixed bag. On Monday, the construction industry analyst reported that the value of new construction starts dipped 5 percent in September compared to August’s numbers.
However, industry insiders continue to see a bright side in the fact that September’s numbers continue a year-over-year trend of progress: for the first nine months of this year, spending climbed 12 percent compared to the same period in 2014.
Here’s the Breakdown:
In September, nonresidential construction starts declined 4 percent compared to August to a $152.9 billion annual rate. Activity in individual sectors within the nonresidential market was mixed:
- Education dropped 20 percent
- Public buildings plunged 42 percent
- Commercial buildings increased 4 percent
- Office buildings grew 20 percent
Residential construction starts fared worse, with an 11 percent decline over August bringing September’s numbers to a $236.9 billion rate. The biggest loser in this sector was multifamily housing. After bringing in strong gains earlier in the year, multifamily declined 30 percent in September.
The nonbuilding sector was a bright spot, albeit one that Dodge chief economist Robert Murray expects is not sustainable. Compared to August, nonbuilding rose 5 percent to a rate of $133.9 billion. Electric and gas projects lead the growth with a 19 percent increase for the month, while highway and bridge work just barely squeaked out a 1 percent increase. According to Murray, the future of the nonbuilding sector will be highly dependent on the outcome of the next multiyear federal transportation bill.
Year Over Year Numbers Look Better
Though September continued the sluggish performance also seen in August, the construction industry as a whole is still looking pretty good compared to where we were last year:
- Residential was up 17 percent to $200.2 billion
- Nonbuilding work was up 35 percent to $143 billion
- Nonresidential construction dipped 7 percent to $154.2 billion
- Net change was a 12 percent increase in construction starts since last year
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